Public Document Pack Resources Scrutiny Commission Agenda

Date: Wednesday, 18 September 2019 Time: 4.00 pm Venue: The Writing Room - City Hall, College Green, Bristol, BS1 5TR

Distribution:

Councillors: Stephen Clarke (Chair), Mark Brain (Vice-Chair), Donald Alexander, Afzal Shah, Mhairi Threlfall, Hibaq Jama, Margaret Hickman, Graham Morris, John Goulandris, Sultan Khan and Clive Stevens

Copies to: Mike Jackson (Executive Director of Resources and Head of Paid Service), Denise Murray (Director - Finance & Section 151 Officer), Tim Borrett (Director: Policy, Strategy & ICT), Penny Fell, Simon Oliver, Tim O'Gara (Director - Legal and Democratic Services), John Walsh (Director: HR, Workforce and Organisational Design (Interim)), Michael Pilcher, Mark Wakefield (Service Manager - Performance & Infrastructure), Johanna Holmes (Policy Advisor - Scrutiny), Tracy Mathews (Performance Improvement Advisor), Louise deCordova (Democratic and Scrutiny Manager) and Lucy Fleming (Head of Democratic Engagement)

Issued by: Johanna Holmes, Democratic Services City Hall, PO Box 3167, Bristol, BS3 9FS Tel: 0117 90 36898 E-mail: [email protected] Date: Tuesday, 10 September 2019 Resources Scrutiny Commission – Agenda Agenda

1. Welcome, Introductions and Safety Information (4pm) (Pages 5 - 6) 2. Annual Business Report (Pages 7 - 10) 3. Apologies for Absence

4. Declarations of Interest To note any declarations of interest from the Councillors. They are asked to indicate the relevant agenda item, the nature of the interest and in particular whether it is a disclosable pecuniary interest.

Any declarations of interest made at the meeting which is not on the register of interests should be notified to the Monitoring Officer for inclusion.

5. Minutes of the Previous Meeting and Action Sheet To agree the minutes of the last meeting as a correct record. (Pages 11 - 17)

And to note and/or comment on the Action Sheet

6. Work Programme To note the work programme. (Pages 18 - 22)

7. Chair's Business To note any announcements from the Chair

8. Public Forum Up to 30 minutes is allowed for this item

Any member of the public or Councillor may participate in Public Forum. The detailed arrangements for so doing are set out in the Public Information Sheet at the back of this agenda. Public Forum items should be emailed to [email protected] and please note that the following deadlines Resources Scrutiny Commission – Agenda will apply in relation to this meeting:-

Questions - Written questions must be received 3 clear working days prior to the meeting. For this meeting, this means that your question(s) must be received in this office at the latest by 5pm on Thursday 12th September.

Petitions and Statements - Petitions and statements must be received on the working day prior to the meeting. For this meeting this means that your submission must be received in this office at the latest by 12.00 noon on Tuesday 17th September.

9. Commercialisation and Innovation (4.20pm) (Pages 23 - 27) 10. Financial Debt and Arrears across the Council (4.40pm) (Pages 28 - 69) 11. Finance Monitoring Report P4 (5.10pm) (Pages 70 - 92) 12. Investment in Regional Community Bank and City Fund (5.20pm) (Pages 93 - 146) A Questions & Answers only item. The July Cabinet paper has been included for information purposes.

13. Performance Report Quarter 1 (5.35pm) (Pages 147 - 156) 14. IT Transformation Programme - Exempt Item (5.50pm) Exclusion of Press and Public (Pages 157 - 162) That under s.100A(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item(s) of business on the grounds that it (they) involve(s) the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of schedule 12A of the Act. Agenda Item 1

www.bristol.gov.uk Public Information Sheet

Inspection of Papers - Local Government (Access to Information) Act 1985

You can find papers for all our meetings on our website at www.bristol.gov.uk.

You can also inspect papers at the City Hall Reception, College Green, Bristol, BS1 5TR.

Other formats and languages and assistance For those with hearing impairment You can get committee papers in other formats (e.g. large print, audio tape, braille etc) or in community languages by contacting the Democratic Services Officer. Please give as much notice as possible. We cannot guarantee re-formatting or translation of papers before the date of a particular meeting.

Committee rooms are fitted with induction loops to assist people with hearing impairment. If you require any assistance with this please speak to the Democratic Services Officer.

Public Forum

Members of the public may make a written statement ask a question or present a petition to most meetings. Your statement or question will be sent to the Committee and be available in the meeting room one hour before the meeting. Please submit it to [email protected] or Democratic Services Section, City Hall, College Green, Bristol BS1 5UY. The following requirements apply:

 The statement is received no later than 12.00 noon on the working day before the meeting and is about a matter which is the responsibility of the committee concerned.  The question is received no later than 5pm three clear working days before the meeting.

Any statement submitted should be no longer than one side of A4 paper. If the statement is longer than this, then for reasons of cost, only the first sheet will be copied and made available at the meeting. For copyright reasons, we are unable to reproduce or publish newspaper or magazine articles that may be attached to statements.

By participating in public forum business, we will assume that you have consented to your name and the details of your submission being recorded and circulated to the committee. This information will also be made available at the meeting to which it relates and placed in the official minute book as a public record (available from Democratic Services).

Page 4 www.bristol.gov.uk

We will try to remove personal information such as contact details. However, because of time constraints we cannot guarantee this, and you may therefore wish to consider if your statement contains information that you would prefer not to be in the public domain. Public Forum statements will not be posted on the council’s website. Other committee papers may be placed on the council’s website and information in them may be searchable on the internet.

Process during the meeting:

 Public Forum is normally one of the first items on the agenda, although statements and petitions that relate to specific items on the agenda may be taken just before the item concerned.  There will be no debate on statements or petitions.  The Chair will call each submission in turn. When you are invited to speak, please make sure that your presentation focuses on the key issues that you would like Members to consider. This will have the greatest impact.  Your time allocation may have to be strictly limited if there are a lot of submissions. This may be as short as one minute.  If there are a large number of submissions on one matter a representative may be requested to speak on the groups behalf.  If you do not attend or speak at the meeting at which your public forum submission is being taken your statement will be noted by Members.

For further information about procedure rules please refer to our Constitution https://www.bristol.gov.uk/how-council-decisions-are-made/constitution

Webcasting/ Recording of meetings

Members of the public attending meetings or taking part in Public forum are advised that all Full Council and Cabinet meetings and some other committee meetings are now filmed for live or subsequent broadcast via the council's webcasting pages. The whole of the meeting is filmed (except where there are confidential or exempt items) and the footage will be available for two years. If you ask a question or make a representation, then you are likely to be filmed and will be deemed to have given your consent to this. If you do not wish to be filmed you need to make yourself known to the webcasting staff. However, the Openness of Local Government Bodies Regulations 2014 now means that persons attending meetings may take photographs, film and audio record the proceedings and report on the meeting (Oral commentary is not permitted during the meeting as it would be disruptive). Members of the public should therefore be aware that they may be filmed by others attending and that is not within the council’s control.

Page 5 Agenda Item 2 Resources Scrutiny Commission

Resources Scrutiny Commission 18th September 2019

Report of: Service Director, Legal & Democratic Services

Title: Resources Scrutiny Commission Annual Business Report 2019/2020.

Officer Presenting Report: Johanna Holmes, Scrutiny Advisor

Contact Telephone Number: 0117 90 36898

Recommendations:

1. To elect a Chair and Vice Chair for the 2019/2020 municipal year

2. To note the Scrutiny Commission’s Terms of Reference

3. To note the membership of the Commission for the 2019/2020 municipal year

4. To confirm the 2019/2020 meeting dates for the Scrutiny Commission

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1. Context and Proposal

1.1 Terms of Reference of the Commission

At its meeting on 21 May 2019 Full Council established this Scrutiny Commission with the following terms of reference:

Terms of Reference - Overview

The role of the Commission is the overview and scrutiny in respect of the implementation of policies, decisions, performance and actions relating to the Resources Directorate with functions that include Legal, Finance, HR, ICT, Policy & Strategy, Procurement, Revenue and Benefits and Commercialisation.

To ensure that overview and scrutiny directly responds to corporate and public priorities, is used to drive service improvement, provides a focus for policy development and engages members of the public, key stakeholders and partner agencies.

To action the annual work programme set by the Overview and Scrutiny Management Board using the following framework:

1. Scrutiny of corporate plans and other major plan priorities within its remit with particular reference to those areas where targets are not being met or progress is slow.

2. Input to significant policy developments or service reviews.

3. Review and scrutiny of decisions made, or other action taken in connection with the discharge of any functions which are the responsibility of the Mayor/Executive, functions which are not the responsibility of the Mayor/Executive, and functions which are the responsibility of any other bodies the Council is authorised to scrutinise.

4. To make reports and recommendations to Full Council, the Mayor/Executive and/or any other body on matters within their remit and on matters which affect the authority’s area or the inhabitants of that area and to monitor the response, implementation and impact of recommendations.

5. To work in collaboration with the Mayor/relevant Executive Member and receive updates from that member on key policy developments, decisions taken or to be taken and progress against corporate priorities.

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6. To report to the Overview and Scrutiny Management Board on progress against the work programme and on any recommendations it makes.

7. To develop a budget review process and ensure that budget proposals are subject to rigorous challenge.

1.2 Membership of the Commission:

 Councillor Stephen Clarke - Chair

 Councillor Mark Brain – Vice Chair

 Councillor Don Alexander

 Councillor Afzal Shah

 Councillor Mhairi Threlfall

 Councillor Hibaq Jama

 Councillor Margaret Hickman

 Councillor Graham Morris

 Councillor John Goulandris

 Councillor Clive Stevens

 Councillor Sultan Khan

1.3 2019 - 2020 Commission Meeting Dates

 4pm, Wednesday 18th September 2019

 3pm, Thursday 31st October 2019

 2pm, Thursday 12th December 2019

 4pm, Thursday 6th February 2020 (Budget Scrutiny Meeting)

Please Note: the Scrutiny Work Programme for the year can be located at Agenda Item 6.

2. Public Sector Equality Duties

1. Before making a decision, section 149 Equality Act 2010 requires that each decision- maker considers the need to promote equality for persons with the following Page 8 Resources Scrutiny Commission

“protected characteristics”: age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation. Each decision-maker must, therefore, have due regard to the need to:

i) Eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Equality Act 2010.

ii) Advance equality of opportunity between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to --

- remove or minimise disadvantage suffered by persons who share a relevant protected characteristic;

- take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of people who do not share it (in relation to disabled people, this includes, in particular, steps to take account of disabled persons' disabilities);

- encourage persons who share a protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

ii) Foster good relations between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to – - tackle prejudice; and - promote understanding.

6. Legal and Resource Implications N/A

Appendices: None

LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 Background Papers:  Full Council, 21 May 2019

Page 9 Public Document Pack Agenda Item 5

Bristol City Council Minutes of the Resources Scrutiny Commission

28 February 2019 at 4.00 pm

Members Present:- Councillors: Stephen Clarke (Chair), Afzal Shah (Vice-Chair), Donald Alexander, Mark Brain, John Goulandris, Margaret Hickman, Tim Kent, Sultan Khan, Graham Morris and Clive Stevens

1. Welcome, Introductions and Safety Information

The Chair led welcome and introductions.

2. Apologies for Absence

There were no apologies for absence.

3. Declarations of Interest

There were no declarations of interest.

4. Minutes of the Previous Meeting & Action Sheet

The Commission Members agreed the minutes of the following previous meetings as correct records:  24th September 2018  6th December 2018  10th January 2019 (Budget Scrutiny Meeting )  14th January 2019 (Budget Scrutiny Meeting)

Members requested that the following comments were added to the 6th December 2018 - Item 12. Collection Fund (Surplus/Deficit) Report A short conversation took place about the high and rising number of ‘Airbnb’s’ in Bristol and what this meant with regards to collection of business rates and council tax. Members asked and it was confirmed

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that the numbers were being monitored. However, Members have clarified that they suggested that the ‘impacts on housing and communities’ were to be monitored and understood not just the actual figures.

5. Chair's Business

There was none on this occasion but the Chair said he wished to thank the Members of the Commission for their hard work throughout the year.

6. Public Forum

No Public Forum received.

7. Work Programme

Members noted the scrutiny Work Programme and made the following comments:  Collection Fund Surplus/Deficit Report; members recommended that further report should be presented to the Commission in the following year  Council Tax Base Report – Members recommended this item should return in the following municipal year.

8. Performance Management

The Director for Workforce and Change presented the published slides to Members. It was stated that the council was in the process of developing a strong performance culture. It was said that some changes were needed because it was stated that 42% of officers were not having their performance managed when it fact 100% of officers should. The current My Performance system had been reviewed by a working group and it was agreed that it was costly, inefficient not as smooth or easy to navigate as it should have been.

A new ‘iTrent’ system that includes an Employee Self Service (ESS) feature being introduced across the whole organisation which was integrated with payroll and HR. It was expected that 100% of council staff will comply with this new system.

Officers added that a new Staff Survey was also being rolled-out right across the organisation during the following week.

Members made the following comments:  A Member said that it was positive to hear that individual managers now have ensuring others have their performance managed as part of their own performance management.

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 It was suggested that everyone should be able to view the results of the Staff Survey. It was recommended that this was added to the Scrutiny Work Programme the following year. It was highlighted that this report may go to the HR Committee but it was agreed by officers that any plans that result from the survey should go to scrutiny yes. ACTION: for any plans arising from the staff survey to be considered by scrutiny  It was asked if 360 degree appraisals would be carried out. It was confirmed they will in some areas and in fact a pilot 360 degree appraisal was currently taking place for the top two tiers of management.  It was confirmed that people would be marked on their performance i.e. 1, 2, or 3

9. Risk Register Report

The Director of Finance introduced the bi-annual Resources Directorate Risk Report to Members and invited them to comment on any areas of interest.

It was explained that there were three 3 new risks in the report which were ICT, Procurement and Brexit Preparedness.

 A Member said that they had been concerned about a previous presentation to scrutiny on the current state of ICT. It was stated further that when one looks at this report you can see that the risk levels are up and another risk has been added. ICT risks hit was said were supposed to be reduced but have instead gone up. He stated that he would ask that question again when the relevant Director was present in the room. The Director of Finance said that it was correct that the risk levels had risen but that there were already plans in place to monitor and manage them.

 The Chair said it appeared there were ‘opportunity’ risks in the report too and if this were so this was rather confusing and needed to be clarified. Officers agreed with this point.

 Members asked why ‘Brexit’ was showing as amber in this report and not red. The Director of Policy & Strategy said that yes as an ‘opportunity’ it is rated as amber. Members were also reminded that this report timeline runs from September to December and the risk had now increased.

 It was confirmed that there would be another up-date on Brexit Preparedness which would be presented to OSMB in March where the risks as a whole would be rated. The Brexit Board were at the time meeting fortnightly.

10.Commercialisation Strategy and Programme

The Director of Commercialisation and Citizens introduced the report to Members. This was an up-date on progress on the New Commercialisation Strategy and Programme 2018/2021 as requested by the Scrutiny Commission in December 2018. The Director stated they are now a team of four officers. Officers said that commercialisation ‘boot camps’ were being run in December and February followed by

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subsequent training and a series of incubator sessions to develop individual projects. The work was not just about generating income but also about efficiency savings and working more effectively.

A Member of the Scrutiny Commission provided a verbal up-date on the Commercialisation and Innovation Working Group (CIWG) of which he is also a Member. It was said that that progress had originally been quite slow but that he very much welcomed the new Director and team. The group had previously had lots of ideas, some very good ones but didn’t really know how to take them forward. For example the pest control service which had been very busy but wasn’t previously making much of a profit but it’s reporting to be now he said. Some ideas are currently on the ‘back-burner’ because he said they can’t do everything at the same time. Some current projects are ‘quick wins’ but they are also taking on some bigger and long-standing issues where the Council is not generating enough income, for example the Harbour which it was said was costing the council £1M per year.

The Chair enquired further about the Harbour and why it was costing the Council so much; officers responded that it wasn’t ‘washing its own face’. The Chair said he thought this was an ‘extraordinary’ situation. Officers said that a stakeholder consultation to review the situation was currently being planned will be undertaken in the near future.

Members congratulated officers on the work so far and said that they were pleased that various conversations were now taking place. It was also stated that a ‘round table’ innovation event for key stakeholders was taking place in March. The Director of Finance said that a number of local authorities have propositions for potential economic growth that need to be brought together so they can understand more if there are ways of progressing them. The Director stated for information that this was outside of the ‘commercialisation’ work-stream.

A Member commented on the seven steps contained within the report and asked if they were ‘check points’ and suggested that there be a number eight which was for the Council to be in a ‘monopoly position’.

Some of the individual projects highlighted in the report were also discussed including the ‘Know Your Place Application’. It was said that the Council owns the intellectual property rights which makes this an even bigger opportunity.

Another Member said that he was impressed with the report partly because he had not expected the Council would be so entrepreneurial and show such of imagination as they currently were.

11.Exclusion of Press and Public 12.Performance Report - Quarter 3 - Part Exempt

The Head of Insight, Performance & Intelligence introduced the report to Members and explained that the purpose of the report was to brief the Commission on the progress made against the Directorate specific Key Performance Indicators (KPIs) for Q3 2018/19. In summary for this quarter 46% of those with

Page 13 [email protected] established targets are performing on or above target and just over half (51%) of those with a direct comparison from 12 months ago have improved. It was said there was a fairly neutral picture when looking at the Directorate as a whole. The following targets were briefly highlighted:  % Corporate Freedom of Information (FOI) requests responded to within 20 working days. This target it was said had never been met which officers commented was disappointing. However, hitting the target would be assisted by the installation of an improved electronic case management system as well as the planned introduction of smarter data retention policies.  My Performance (Employee Performance Management system); compliance for BCC as a whole is low and has not changed this quarter but preparations are underway to implement the new HR system which it’s anticipated will improve the rates (as discussed above).  % of deaths registered within 5 working days – still below target but is improving.

Members raised the following points and questions:  It was generally agreed that the report contained some mixed results.  The difference between of progression rates of BME and non-BME employees: Members suggested that this needed to be a focus for officers to address. Officers agreed and said that the HR Committee are looking at this in more detail.  BCP522: Reduce the average number of working days lost to sickness (BCC): Officers said that sickness levels were at their highest level since 2010 but that it was believed that this was related to a number of factors. Officers referred to the information contained within the report and said that HR are working with managers at all levels to further develop policies and practices to improve staff engagement and wellbeing that will reduce sickness absence.  DRE212 Legal Services spend on external barristers: this was well above target but officers said that figures were slightly misleading as they are actually underspending now but may have underestimated what we may have to pay out, so they are still treating this position with caution.  BCP327: % Corporate Freedom of Information (FOI) requests responded to within 20 working days. This was highlighted as well below target and officers said that BCC had been on a warning from the Information Commissioner. The warning has not been followed through because officers have altered and improved the situation as instructed. Members asked is FOIs were ‘cab ranked’ and officers responded that they were well triaged across to the relevant manager when they are arrive. It was explained that individual directors retain responsibility for them as the FOI team don’t have the necessary specific knowledge to respond. It was said that the management team get a report to flag what’s outstanding. There are FOI requests that require gathering huge volumes of information. Some were very complex and so it can take a long time to respond i.e. longer than 20 days but is better to comply and be transparent than to refuse to do them. It was asked how much time was spent on them. Officers said that they couldn’t say precisely but there were some individuals that regularly submitted FOI requests. Members said that it might be useful to highlight how much council tax is being used to comply with them. Officers said that there are quite a lot of international requests, so they are putting some information on-line so the information is readily available.

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In line with the following information, the remainder of this agenda item and the following agenda item (13) were taken in an exempt session.

Exclusion of Press and Public That under s.100A(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item(s) of business on the grounds that it (they) involve(s) the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of schedule 12A of the Act.

13.ICT Systems and Strategy - Exempt

As stated above, this item was taken in an exempt session.

Meeting ended at 7.00 pm

CHAIR ______

Page 15 Bristol City Council Resources Scrutiny Commission Action Sheet 18th September 2019

Resources Scrutiny Commission Action Sheet 2019/2020 Agenda Title of Report/ Action Responsible Officer Action taken and date Item Description / Member completed

28th February 2019 7. Scrutiny Work Programme ACTION: Members recommended that the Scrutiny Advisor Members selected both items for following two items should be presented to the 2019 / 2020 Scrutiny Work the Commission during the following Programme at the Scrutiny

Page 16 Page municipal year: Workshop in June.  Collection Fund Surplus/Deficit Report They will both be taken at the  Council Tax Base Report meeting on the 31st October 19 8. Performance Management ACTION: for any future plans arising from Members and Senior Further to a discussion between the the Staff Survey to be considered by Officers Chair and Officers it was agreed that scrutiny scrutiny of the Staff Survey Results would sit with the HR Committee Scrutiny Work Programme 2019 / 2020

People Scrutiny Communities Scrutiny Growth and Resources Scrutiny Overview & Scrutiny Commission Commission Regeneration Scrutiny Commission Management Board Commission July 2019 2pm, Thursday 18th July 2pm, Thursday 24th July 6pm, Tues 23rd July 6pm, 17th July (MQT 5pm) (WECA Briefing beforehand) Annual Business Report Annual Business Report Annual Business Report Performance Report (Q4) Performance Report (Q4) Performance Report (Q4) Performance Report (Q4) Risk Report (Corporate) Transition Support for Parks and Green Spaces School Streets and No-idling Clean Air Plan Disabled Young People Strategy (possibly allotments) SEND Standing Item -> SEND Crime and Disorder - Crime Public Transport BREXIT Preparedness Report Strategy and ASB performance including ‘Transport Authority and Governance’, Bus Strategy, Bus Deal, real-time Page 17 Page information, and future mobility Better Lives – focus on Waste – recycling and reuse; Multimodal Transport Work Programme – including working age adults waste minimisation; clean (including mass transit and Scrutiny Inquiry Days and Streets and enforcement rail, interchanges, ticketing) Task and Finish Groups (including graffiti update). Budget Scrutiny Process Confirmation

BCC Thematic Boards Agenda Item 6 Health Sub-Committee Terms of Reference Temple Island - update on proposals and disposal arrangements August 2019 3pm - 14th August Companies Performance September 2019 Sept TBC – Post Cabinet 6pm, Thurs, 26th September 4pm, Weds 18th September Dispatch Performance Report (Q1) Annual Business Report Air Quality (Cabinet Report) People Scrutiny Communities Scrutiny Growth and Resources Scrutiny Overview & Scrutiny Commission Commission Regeneration Scrutiny Commission Management Board Commission Risk Report Performance Report (Q1) Assets Strategy Risk Report (TBC) Leadership Finance Monitoring Reports Update on the Mayor’s IT Transformation Climate Emergency Action Programme

Plan - To included External Auditor Local Plan ( responses to Financial Debt / Arears across public consultation) the council

& Joint Spatial Plan (JSP) Bristol Harbour Review Commercialisation and Innovation – general

Page 18 Page overview Investment in Regional Community Bank and City Fund – questions only Annual Business Report October 2019 5pm, Monday 14th October 5pm, Thursday 10th October 3pm Thurs 31st October 6pm Wed 2nd October (MQT 5pm) – MAY BE CANCELLED Performance Report (Q1) Performance Report (Q1) Finance Monitoring Report Performance Report (Q1) SEND Standing Item -> SEND Libraries (possibly 9 Dec) IT Transformation OFSTED Inspection/ Programme (Standing item) Improvement plan Contextualised Safeguarding Neighbourhood Enforcement Legal Services - Service Plan Bristol is Open

(TBC) and Draft Strategy Strengthening Families Commercialisation and BREXIT Preparedness Report Risk Report Programme Innovation (Standing item) Risk Report Collection Fund Financial Surplus/Deficit

Report Council Tax Base Report Report from Financials T&F People Scrutiny Communities Scrutiny Growth and Resources Scrutiny Overview & Scrutiny Commission Commission Regeneration Scrutiny Commission Management Board Commission Group (TBC) November 2019 2pm, Thursday 28th 6pm Thurs, 14th Nov November Performance Report (Q2) Performance Report (Q2) SEND Standing item -> Bristol Local Flood Risk Strategy for Inclusion Management Strategy, including River Avon Flood Strategy Public Health Commissioning Cumberland Basin / Western Services Harbour (pre-consultation Briefing early summer ) Drug consumption rooms and Temple Meads and St Philips

assisted 19 Page heroin treatment Master Plan Domestic abuse services – a Cabinet paper will be going to set out services. December 2019 10am, Monday 9th December 2pm Thursday 12th December 5pm Weds, 18th December

Performance Report (Q2) Performance Report (Q2) Performance Report Q2 Keeping Bristol Safe - new Finance Monitoring Reports Risk Report (TBC) governance arrangements and remit. Joint session with People Scrutiny Commission Housing Lettings Review Standing item – FSA/ICT Housing Company Business Systems and Strategy Update Plan Information Management Energy Company Business

Strategy Plan Standing item - Bristol Waste Company Commercialisation and Business Plan Innovation Update from Financials T&F City Leap

Group People Scrutiny Communities Scrutiny Growth and Resources Scrutiny Overview & Scrutiny Commission Commission Regeneration Scrutiny Commission Management Board Commission Contracts and Procurement Budget Scrutiny TBC January 2020 6pm Weds 23rd January TBC Performance Report (Q2) One City Plan – annual report tbc One City Plan – progress

update

February 2020 5pm, Monday 10th February 20 Page Budget Scrutiny TBC SEND Standing Item – Hospital Education Fixed Term Exclusions

March 2020 10am, Thursday 12th March Risk Report Performance Report (Q3) Community strategy, including community partnerships / Area Committees Bristol Impact Fund (funding for the voluntary sector)

Items to be Scheduled Sports Strategy briefing Council House Budgetary Bristol City Council’s Business Community Safety Programme (TBC – likely joint Plans 19/20 Partnership / Crime and item with Communities SC Disorder briefing: To inform later in the year) for December CSC (new structure – new governance arrangements and what is the remit). Local Cycling and Walking Performance criteria for Infrastructure Plan (to be waste – possible T&F discussed with Officers)

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Resources Scrutiny Commission – Report Resources Scrutiny Commission 18 September 2019

Report of: Director: Commercialisation + Citizens and Shareholder Liaison

Title: Update Report on Bristol City Council New Commercialisation Strategy 2019/22

Ward: N/A

Officer Presenting Report: Penelope Fell

Recommendation That the Resources and Scrutiny Commission note: 1. Progress on the development, implementation and evaluation of the Council’s New Commercialisation Strategy and Programme as requested by the Resources Scrutiny Commission (RSC).

The Report addresses the following significant issues: 1. It updates the RSC on progress made on delivering the BCC Commercialisation Strategy and Programme 2019/22. 2. Outlines consideration of the above by attendees at a Commercialisation and Innovation Working Group (CIWG) Away Day held on 7 August 2019, and sets out the recommended actions arising from that meeting. 3. It refers to the Director: Commercialisation + Citizens’ additional responsibilities and roles as Shareholder Liaison for BCC wholly-owned companies and interdependencies with Council commercialisation activities. 4. Provides detail on additional Commercialisation Strategy aims and business objectives to secure efficiency savings and income growth from BCC historic assets whilst maintaining agreed service delivery standards. 5. In conclusion, recommends the next steps needed to deliver the Commercialisation Strategy and Programme 2019/22.

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1. SUMMARY This Report sets out progress made on the determination, development and delivery of BCC’s Commercialisation Strategy and Programme 2019/22 since the previous update Report to the Resources Scrutiny Commission (RSC) held on 6 December 2018.

2. PROGRESS MADE ON DELIVERING THE BCC COMMERCIALISATION STRATEGY AND PROGRAMME 2019/22 RSC will recall discussion at their meeting on 6 December 2018 when the Director: Commercialisation + Citizens reported progress on her plans to reshape and commercialise Council services together with the steps needed to begin to implement corporate commercialisation plans that meet the Mayor’s and BCC corporate objectives.

In order to ensure the BCC Commercialisation Strategy and Programme was both up to date and fit for purpose for 2019/22, a CIWG Away Day was held on 7 August 2019. At the Away Day, participants were asked whether the following commercialisation principles, agreed at the Commercialisation Summit held in November 2018, were still the right ones to determine, develop, and deliver efficiency savings and income growth, whilst maintaining agreed service standards. Those principles are:

1. Simplify commercialisation decision-making structures, and provide opportunities for Directorates with viable commercial projects to be part of a New Commercialisation Strategy to make the Council more business-like. 2. Ensure the Council adopts the (3 year) New Commercialisation Strategy to meet the Council’s economic, social and environmental priorities. 3. Deliver the New Commercialisation Strategy through a three year Commercialisation Programme made up of major, medium level and ‘micro’ commercialisation projects to be properly resourced, professionally supported using the Council’s pivotal role in the local economy to work in partnership with both the private sector and other Core City Councils. 4. Apply SMART objectives to the commercialisation of Council services projects so that the Council approach to commercial development became more up-to-date and also fit-for-purpose. 5. Improve and streamline business case preparation, evaluation, approval, monitoring and scrutiny by the introduction of a Council-wide commercialisation training programme to up-grade officer skills and knowledge in presenting projects for consideration. 6. Include as commercialisation development priorities the following shortlist of proposals:

 event spaces: effectively and cohesively utilising our unique spaces as one service;  gritting private areas;  expanding the cash transport service;  reinforcing the internal take up of, and expanding, the Translating and Interpreting service;  examining the potential to expand the telecare service; and,  examining the potential to expand services at Exmouth Camp.

7. Include the above findings in a Report from the Director: Commercialisation to the Resources Scrutiny Commission.

The Director: Commercialisation + Citizens reported on on progress made on delivering the BCC Commercialisation Strategy and Programme 2018/21.

Key achievements included holding a successful CIWG Away Day on 7 August that approved the progress made in 2018/19 and endorsed the Aims of the rolling Strategic Plan 2019/22 and the Business Plan Objectives 2019-20. In particular:  a Historic Asset Review Programme, commencing with Bristol Harbour, and then Market and Docks Estate;  a Commercialisation Programme 2019-20, comprising: the renovation of the Harbour facilities; increased electric vehicle registrations and mobile maintenance in Fleet Services; events and

Page2 23 Resources Scrutiny Commission – Report

conferences in BCC historic spaces; joinery shop; MEES enforcement; diversity training; improved take up and access to Translating and Interpreting services; Know Your Place service expansion; that will result in income growth achievement of £250k in 2019-20;  a programme of micro projects, to be determined, to be delivered on an immediate full cost recovery, year on year basis, with a focus on service based innovation and staff and community engagement; and,  establishment of the Commercialisation Development Team – with the Commercialisation Development Manager yet to be appointed.

In addition, my responsibilities and role as Director: Commercialisation + Citizens and Shareholder Liaison will result in enhanced partnership working across BCC’s wholly owned companies (Bristol Waste, Bristol Energy, Bristol is Open and Goram Homes), to achieve joint income growth as well as efficiency savings through (for example) shared support and back office services.

CIWG Away Day participants endorsed the above principles for 2019/22, adding that BCC should:

 use its influence to tackle land ownership issues in both private and public sectors;  take action to challenge Council oriented standard procedures, as “…the LA way of thinking takes too much time”;  approach commercialisation in a more flexible way, and be less protective of “established interests”;  simplify commercialisation governance and decision-making structures;  understand corporately the drivers that make things happen, and barriers that delay delivery;  endorse and make the decisions that support commercialisation so that it can move forward in a positive way

The elected members attending wanted BCC’s commercialisation principles in 2019/22 to be:  ambitious;  progressive and agile, based on “get on with it” culture change; and,  flexible enough to accept some risk taking.

In response, BCC officers present set out the particular challenges that face BCC in establishing:  a shared agenda with external stakeholders, so that the Council could make best use of external funding for Council led projects; and,  a common approach with internal Council Directorates to achieve best value from corporate commercialisation activities instead of short-term, unplanned, one-off approaches to commercialisation that seemed to offer the Council income growth but that proved unprofitable, or even resulted in a deficit, in the long run.

In conclusion, participants endorsed a proposal, made by two elected members present, that the respective BCC Scrutiny bodies should be used to make Directorates stick to the corporate commercialisation agenda, and would help by expecting officers to do so when developing projects for consideration. Finally, it was said BCC Scrutiny bodies should ask questions that challenged each Directorate to demonstrate how their business cases would achieve efficiency savings, create income growth, and maintain agreed service delivery standards.

3. INTERDEPENDENCIES BETWEEN BCC WHOLLY-OWNED COMPANIES AND COUNCIL COMMERCIALISATION ACTIVITIES The Director: Commercialisation + Citizens reported that on 1 July 2019 her job role had expanded as she had been asked to assume additional responsibilities for BCC Shareholder Liaison with Council wholly- owned companies. This role had previously been the responsibility of the former Shareholder Liaison Director, David Lawrence.

Page3 24 Resources Scrutiny Commission – Report

She added that although her additional shareholder liaison role was wider than her commercialisation responsibilities, there were also a number of additional interdependencies between BCC wholly-owned Companies: Bristol Energy, Bristol Waste, Bristol is Open, and, most recently, Goram Homes: and that this relationship could be developed to create efficiency savings and income growth subject to mutually beneficial agreement to specified service standards.

4. THE COMMERCIALISATION OF BCC HISTORIC ASSETS Away Day participants were then split into groups and asked for feedback on:  first, how the principles endorsed for the Commercialisation Strategy 2018/21 could be amended to address the action needed to improve the City’s historic assets; and,  second, to discuss and confirm the actions needed as a result of the Historic Asset Review.

Participants’ comments were:  Access to the public realm, access to the Harbour In summary the issues were:  there are potential benefits for BCC, stakeholders and the wider public;  BCC was doing all it could to provide safe open access but members of the public had personal responsibility when entering the water on their own initiative;  the need to review Land Registry records to understand which properties controlled what areas of land;  where access included not being able to moor; and,  BCC should use CPO powers to secure access to maintain Harbour walls.

ACTION – elected members present endorsed “push CPO”.

 Business Rate Income In summary the issues were whether:  Harbour business rate income should be ‘ring fenced’ for the harbour with (invest to save) business rate reductions; or,  use it for other parts of the City.

ACTION – elected members present endorsed “support and promote business rates to incentivise other parts of the City”.

5. CONCLUSION RSC are asked to note the action needed to implement the Commercialisation Strategy and Programme 2019/22, namely the continuation of: 1. The Commercialisation Strategy 2019/22 to meet the Council’s economic, social and environmental priorities. 2. The Commercialisation Programme 2019/22 - made up of major, medium level and ‘micro’ commercialisation projects - to be properly resourced and professionally supported, using the Council’s pivotal role in the local economy to work in partnership with both the private sector and other Core City Councils. 3. Major Historic Asset Programme development, as appropriate, as commercialisation development project priorities. 4. SMART objectives being applied to the commercialisation of Council services projects so that the Council approach to commercial development becomes not only up-to-date but also fit-for-purpose. 5. Improved business case preparation, evaluation, approval, monitoring and scrutiny by the continuation of a Council-wide commercialisation training programme to up-grade officer skills and knowledge in presenting projects for consideration. 6. Simplified commercialisation decision-making structures to provide opportunities for other Directorates with viable commercial projects to be part of a New Commercialisation Strategy that would make the wider Council more business-like.

Page4 25 Resources Scrutiny Commission – Report

7. Commercialisation and Innovation Working Group (CIWG) regular reports to the RSC on the development implementation and monitoring of the Directorate New Commercialisation Strategy and Programme. 8. The Commercialisation Strategic Plan 2019/22 and Business Plan 2019/20 as a standing information item on the Agendas of both bodies with exception reporting at the direction of both meetings.

6. Policy

Not applicable

7. Consultation a) Internal Elected members including CIWG members, BCC Head of Paid Service, BCC s151 Officer, Resources EDM.

b)External Not applicable

8. Public Sector Equality Duties

Before making a decision, section 149 Equality Act 2010 requires that each decision-maker considers the need to promote equality for persons with the following “protected characteristics”: age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation. Each decision-maker must, therefore, have due regard to the need to:

i) Eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Equality Act 2010.

ii) Advance equality of opportunity between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to --

- remove or minimise disadvantage suffered by persons who share a relevant protected characteristic;

- take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of people who do not share it (in relation to disabled people, this includes, in particular, steps to take account of disabled persons' disabilities);

- encourage persons who share a protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

iii) Foster good relations between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to – - tackle prejudice; and - promote understanding.

Appendices: None

LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 Background Papers: None

Page5 26 Agenda Item 10

Resources Scrutiny Commission

Resources Scrutiny Commission 18 September 2019

Report of: Mike Jackson, Executive Director Resources / Denise Murray, Service Director, Finance

Title: Financial Debt / Arrears across the Council

Ward: All

Officer Presenting Report: Martin Smith

Contact Telephone Number: 0117 97 55744

Recommendations :

1. Note this report provides a high level view of debt across the Council and details the progress being taken to provide business efficiencies in respect of sundry debt.

The significant issues in this report are:

1. Functionality of core line of business system for invoicing and collection of sundry debts ensuring fit for purpose thereby providing optimal functionality to support service areas.

2. Levels of debt across service areas.

Page 27 Resources Scrutiny Commission

1. Summary This paper provides a high level overview of the debt position across revenues, benefits, parking services, housing (domestic rent) and sundry debt (including adult social care) and details the steps being taken to improve collection and minimise sundry debt. There is also further in depth analysis on the sundry debt position contained within the appendices.

2. Context 2.1. The Council sends invoices, bills and demand notices in respect of various statutory and non- statutory charges. The methods for the billing and recovery of statutory charges are prescribed by statute whereas those in respect of non-statutory debts are less prescribed.

2.2. The Council collects income from many streams; some of this activity is governed by legislation while others by sound principles of financial management. The key to economic, efficient and effective income management is the creation and maintenance of a clear framework that sets out the approach, principles and strategy within which all activities will be conducted.

2.3. It is essential that all monies due are collected effectively by the Council, and that debt owed to the Council is kept to a minimum. This is because the Council has both a legal duty and a responsibility to its citizens to ensure that income due is paid promptly.

2.4. Effective income management processes are critical to the delivery of overall Council service objectives. An efficient income management process contributes to the availability of resources for wider or deeper service provision. Every pound of income that is not collected or takes extra effort to collect leads to one or two potential outcomes namely:

• A resource needing to be taken from the overall service budget to compensate for the cost of collection, for example charging order costs; or • Loss of income for the Council which results in an increased bad debt provision or write off.

2.5. This briefing paper and appendices detail and highlights the current processes for the billing, collection and recovery of monies owed to the Council and the debt position across a number of service areas as well as the work ongoing to improve collection in respect of sundry debt.

2.6. Current position 2.6.1. Overarching level of debt per debt type as at 01 Apr 2019 are shown in the table overleaf (see appendix for further detail).

Page 28 Resources Scrutiny Commission

1 This figure is subject to annual fluctuations as these debt types are billed on an ‘as required’ basis. 2 These debt types are collected outside of revenues. 3 Some of this debt is billed on as ‘as required’ basis. Excludes any debt secured by charging order (HASSASSA or DPA).

Sundry debt arrears, which are the focus of this paper, were £39.1m at 01 Apr 2019; however for the purpose of providing the latest information further detail is based on 30 Jun 2019 (quarter 1).

2.7. Sundry Debt The total sum outstanding respect of sundry debt at the end of quarter 1 was £46.4m. The table below compares this figure with that as at 01 Apr 2019 and shows an overall reduction in older debt. The increases in the sums unpaid for up to 90 days and up to 365 days are not unusual at this time within the financial year and are expected to decrease over the coming months. Further information is contained in the appendices.

The sundry debt team is made up of seven full time equivalent officers collecting a debit of circa £130m per annum hence the reliance on service areas taking some ownership of unpaid invoices issued within their area.

2.8. Positives 2.8.1. Temporary resource in adult social care delivered targeted activity which has helped to reduce the level of older debt.

2.8.2. Centralisation of debt recovery has provided a more consistent approach to debt recovery and an increased focus.

2.8.3. Additional funding has been identified following a review of budgets which will provide additional resources to assist in the collection of sundry debt.

Page 29 Resources Scrutiny Commission

2.8.4. Sundry debt reporting is now included in the monthly financial monitoring reports by service area.

2.8.5. Engagement with individual service areas is providing focus on unpaid invoices within those areas.

2.8.6. The ethical debt project will deliver new and improved collection processes in respect of sundry debt once these have been embedded for other debt types. The project will include a refresh of our policy on dealing with debts Council wide.

2.9. Challenges / Areas for Further Improvement 2.9.1. The Council’s exposure to sundry debt is exacerbated both by limited functionality of core line of business systems and by increases in adult social care debt which have led to increases in bad debt provision.

2.9.2. The limitations of the current processes (workflow) within the line of business system prohibit timely interventions and actions. The current workflow process does not provide for the automatic progression of invoices to debt recovery post reminder post budget holder agreement, nor has the debt recovery specific module been implemented. These matters cause delays in recovery activity. In conjunction with this the workflow for write off is cumbersome and needs to be streamlined.

ACTION BEING TAKEN: Workflow being rewritten and new modules implemented to create and deliver business efficiencies.

2.9.3. When the line of business system was introduced all training was ‘self-taught’ with no physical face to face training provided for internal teams. The absence of a full training manual and process guide hampers changes to process and procedures and the implementation of modules and knowledge management across the wider user group.

ACTION BEING TAKEN: Full and concise training manual to be created to aid users.

2.9.4. The line of business system has not been configured to provide a full reporting suite in respect of sundry debt resulting in a lack of oversight and drill down capability requiring extensive manual exercise. This will enable full and regular reporting to EDM’s.

ACTION BEING TAKEN: Internal teams are working together to create and deliver an appropriate reporting resolution within the resources available. Reports detailing outstanding invoices and debt are circulated at Directorate level.

2.9.5. Bad debt provision is currently held centrally. This means that invoices are at risk of being unpaid are not written back to service budgets. Write offs are reflected in budgets once actioned but the existing process is cumbersome. Combined these matters reduce the incentive to ensure correct and proper invoicing and timely recovery of outstanding monies.

Page 30 Resources Scrutiny Commission

ACTION BEING TAKEN: Bad debt provision and write offs to be written back to service budgets on a monthly basis to allow for proper budget management, provide accountability and encourage timely resolution of unpaid invoices.

2.9.6. Care Act guidance suggests embedding the initial stages of the recovery of care debt within social care teams. This was previously trialled and if maintained will deliver ongoing benefits to service users and the Council’s overall debt position.

ACTION BEING TAKEN: The adult social care service is investigating the most effective way to utilise resources to deliver efficiencies which will improve the Council’s sundry debt position.

3. Policy Not applicable.

4. Consultation

a) Internal Impacted service areas.

b) External None.

5. Public Sector Equality Duties

5a) Before making a decision, section 149 Equality Act 2010 requires that each decision-maker considers the need to promote equality for persons with the following “protected characteristics”: age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation. Each decision-maker must, therefore, have due regard to the need to:

i) Eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Equality Act 2010.

ii) Advance equality of opportunity between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to --

- remove or minimise disadvantage suffered by persons who share a relevant protected characteristic;

- take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of people who do not share it (in relation to disabled people, this includes, in particular, steps to take account of disabled persons' disabilities); Page 31 Resources Scrutiny Commission

- encourage persons who share a protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

iii) Foster good relations between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to – - tackle prejudice; and - promote understanding.

5b) There is no requirement for an EqIA as this report is only providing a position statement.

Appendices:

 Appendix 1: Debt Current State Assessment slide deck  Appendix 2: Debt Current State Assessment report

LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 Background Papers:

 Background Paper 1: Care Act 2014: Care and support statutory guidance Annex D – Debt Recovery (see www.gov.uk/government/publications/care-act-statutory-guidance/care-and- support-statutory-guidance#AnnexD)

Page 32 Debt – Current State Page 33 Page Assessment

Finance Revenues Slide 1 Billing and Invoicing Overview

 Bristol City Council sends demand notices and invoices in respect of a wide range of services, some of which are legislative, some statutory and others which are as a result of

Page 34 Page purchases by citizens.

 Failure to collect significant sums has a detrimental effect on the Council’s finances and budget position.

Finance Revenues Slide 2 Summary Value of Debt Outstanding 1st April 2019

Debt Type Debt Level Council Tax (exc Chg Ord £622k) £13.8m Non-Domestic Rate £5.3m Overpaid Housing Benefit (Debtors)1 £8.8m Sundry Debt3 (exc Chg Ord £1.53m) £39.1m

Page 35 Page Housing Rent (Current Tenant)2 £6.7m Housing Rent (Former Tenant)1,2 £2.4m Other HRA1,2 £2.2m Parking Services1,2 £2.1m Total £89.4m

1 This figure is subject to annual fluctuations as these debt types are billed on an ‘as required’ basis. 2 These debt types are collected outside of Revenues. 3 Some of this debt is billed on as ‘as required’ basis. Excludes any debt secured by charging order (HASSASSA or DPA).

Finance Slide 3 Revenues Revenues In Year Collection (%)

Revenues In Year Collection (%) 115.00%

110.00%

105.00%

100.00% Page 36 Page

95.00% Percentage

90.00%

85.00%

80.00% 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Council Tax 96.08% 96.47% 96.55% 96.78% 96.79% 96.82% NNDR 97.52% 98.04% 97.93% 98.17% 97.93% 98.31% Overpaid Housing Benefit 86.30% 83.84% 112.36% Sundry Debt 84.41% 90.49% 91.50% 90.70% 91.44% 91.59%

Note: Changes were made in the method of collection for Overpaid Housing Benefit prior to 2016/17 and therefore comparable data is unavailable for the previous periods

Finance Revenues Slide 4 Council Tax Page 37 Page

In Progress

Finance Revenues Slide 5 Business Rates Page 38 Page

In Progress

Finance Revenues Slide 6 Overpaid Housing Benefit cont. Overpaid Housing Benefit: Collection 2017/8 to 2019/20

£30 115.00%

110.00%

£25

105.00%

Millions £20

100.00% £15

Page 39 Page 95.00%

£10 90.00%

£5 85.00%

£0 80.00% 2017/18 2018/19 2019/20 Total W/Off's Benefits (£'s) £569,302.48 £662,984.27 £83,957.32 Total Arrears B/F Benefits (£'s) £8,954,455.50 £8,905,954.88 £8,938,293.54 Total W/Off's Debtors (£'s) £1,240,577.23 £948,316.44 £117,411.51 Total Arrears B/F Debtors (£'s) £7,271,570.71 £7,823,021.93 £8,692,261.09 Invoices Raised (£'s) £7,548,556.53 £7,298,266.89 £1,101,441.71 In Year Collection (% against Target) 83.84% 112.36%

Finance Revenues Slide 7 Accounts Receivable: Sundry Debt Page 40 Page

In Progress In progress

Finance Revenues Slide 8 Parking Services Page 41 Page

In progress In Progress

 PCN income raised is based on the discounted rate that has to be offered as part of the statutory process. Analysis shows that upwards of 80% of PCNs are paid at this discounted rate. The total arrears brought forward figure shows unpaid PCN’s at face value, i.e. unadjusted as they have remain unpaid past the deadlines for the discounted rate.

 Average lifecycle of a PCN is 18 months, so the collection percentage shown is the total number of paid PCNs over the full lifecycle period. Cases from 2017/18 and 2018/19 are still ongoing hence the current, lower, collection rate. Finance Revenues Slide 9 Rent and Income Management Service Page 42 Page

In progress In Progress

Finance Revenues Slide 10 Overview of Recovery Processes Page 43 Page

Finance Revenues Slide 11 Page 44 Page Sundry Debt

Finance Revenues Slide 12 Aged debt by Directorate @ 30 June 2019 (Expanding People Directorate by Division)

Directorate Division Up to 59 days 60-89 Days 90-119 Days 120-365 Days 1-2 Years Over 2 Years Outstanding Amount People Adult Social Care 6,229,979.98 810,242.06 646,127.21 7,486,459.65 3,009,506.15 4,799,154.39 22,981,469.44 People Children and Families Services 44,108.18 18,714.85 75,394.86 59,814.14 24,874.55 81,628.71 304,535.29 People Educational Improvement 6,132,370.45 30,053.16 0.00 1,339,175.58 53,642.93 177,472.05 7,732,714.17 People Capital - People 0.00 0.00 0.00 0.00 9,462.99 0.00 9,462.99 People Public Health 16,924.94 419,094.00 6,924.94 0.00 511.20 21,566.30 465,021.38 People Public Health - General Fund 83,823.00 0.00 0.00 0.00 32,047.00 1,817.69 117,687.69 People Total 12,507,206.55 1,278,104.07 728,447.01 8,885,449.37 3,130,044.82 5,081,639.14 31,610,890.96 Page 45 Page

Resources 4,277,466.91 105,043.94 481,931.80 148,939.74 39,107.07 284,774.58 5,337,264.04 Growth & Regeneration 3,868,823.27 488,581.03 1,623,815.60 539,826.38 190,114.76 866,151.19 7,577,312.23 Housing Revenue Account 79,388.09 525,096.44 10,400.84 179,825.68 227,431.03 206,659.58 1,228,801.66 Dedicated Schools Grant 85,710.27 2,860.04 9,198.80 84,489.62 3,338.12 38,948.34 224,545.19 Corporate Funding & Expenditure 757.55 0.00 24,006.68 72,235.69 701.32 12,394.46 110,095.70 Cost centres o/s of rev reporting 16,558.62 300.00 8,894.03 40,335.00 29,493.69 244,691.59 340,272.93 Non People Total 8,328,704.71 1,121,881.45 2,158,247.75 1,065,652.11 490,185.99 1,653,619.74 14,818,291.75

Grand Total 20,835,911.26 2,399,985.52 2,886,694.76 9,951,101.48 3,620,230.81 6,735,258.88 46,429,182.71

Finance Revenues Slide 13 Aged Debt by Collection Code @ 31 March 2019

31/03/2019 Total 18,616,527.77 1,688,336.91 1,555,030.21 6,207,853.89 3,119,608.50 7,938,429.19 39,125,786.47 Aged Debt by Collection Code @ 30 June 2019

Collection Code up to 59 Days 60-89 Days 90-119 Days 120-365 Days 1-2 Years Over 2 years Outstanding Amount CC1 Standard 15,091,526.43 1,122,754.32 2,171,843.86 6,541,749.54 518,385.29 1,999,247.18 27,445,506.62 CC18 Trading with Schools 3,684,965.73 940.00 84,845.53 70,597.27 3,965.75 100,152.57 3,945,466.85 CC2 Care 34,019.20 155,172.37 66,573.72 262,432.33 188,923.41 1,616,909.18 2,324,030.21 CC3 Homecare 1,788,565.15 582,806.06 542,829.82 2,762,619.82 2,556,988.42 2,627,932.20 10,861,741.47 Various other codes 236,834.75 538,312.77 20,601.83 313,702.52 351,967.94 391,017.75 1,852,437.56

Page 46 Page Total 20,835,911.26 2,399,985.52 2,886,694.76 9,951,101.48 3,620,230.81 6,735,258.88 46,429,182.71 Recovery Progress @ 30 June 2019 (excludes invoices not yet due)

Collection Code Number of Amount Invoices Invoices Payment Value of Pay Invoices with Invoices with Referred to Referred to Debt invoices Overdue within within Plan Active Plans AR / ASC AR / ASC Debt Debt Management overdue Reminder Reminder outstanding Debt Teams Teams Management £ Process Process £ £ £ £

CC1 Standard 4,578 19,162,134.22 509 5,077,440.24 681 4,378,587.62 1,425 6,859,486.01 1,963 2,846,620.35 CC18 Trading with Schools 149 261,918.32 7 2,137.20 0 0.00 128 252,584.14 14 7,196.98 CC2 Care 598 2,316,796.94 3 26,785.93 80 128,845.82 279 883,607.57 236 1,277,557.62 CC3 Homecare 14,955 9,757,239.10 563 602,589.66 1,668 718,677.23 11,789 7,491,865.76 935 944,106.45 Various other codes 4,598 1,646,654.86 687 36,926.08 1,280 809,945.21 1,624 282,773.20 1,007 517,010.37 24,878 33,144,743.44 1,769 5,745,879.11 3,709 6,036,055.88 15,245 15,770,316.68 4,155 5,592,491.77

Finance Revenues Slide 14 Top Fifteen Debtors @ 30 June 2019

Account Ref Up to 59 Days 60-89 Days 90-119 Days 120-365 Days 1-2 Years Over 2 years Outstanding Amount Recovery Process stage Corporate (Governmental) Bodies Sundry01 4,326,621.00 0.00 0.00 4,302,895.00 0.00 0.00 8,629,516.00 AR Team Sundry03 0.00 0.00 531,011.86 219,074.50 0.00 0.00 750,086.36 Referred to Debt Management Sundry04 228.80 17,457.24 824,354.10 128.16 0.00 0.00 842,168.30 AR Team Sundry11 0.00 0.00 139,709.00 0.00 0.00 0.00 139,709.00 AR Team PFI Charges Sundry02 0.00 0.00 0.00 395,172.36 0.00 0.00 395,172.36 Payment Plan Sundry05 124,161.03 0.00 0.00 0.00 0.00 0.00 124,161.03 Reminder Process Adult Care Debts

Sundry06 47 Page 0.00 0.00 0.00 0.00 0.00 94,017.89 94,017.89 ASC Debt Team Sundry07 0.00 0.00 0.00 0.00 0.00 140,476.50 140,476.50 Referred to Debt Management Sundry08 0.00 0.00 0.00 0.00 0.00 195,860.02 195,860.02 Referred to Debt Management Sundry09 0.00 0.00 0.00 0.00 44,085.92 48,093.73 92,179.65 Referred to Debt Management Sundry10 0.00 149,108.88 0.00 0.00 0.00 0.00 149,108.88 ASC Debt Team Sundry12 0.00 0.00 0.00 0.00 0.00 115,685.12 115,685.12 Referred to Debt Management Sundry13 0.00 0.00 0.00 0.00 37,928.16 52,622.97 90,551.13 Referred to Debt Management Businesses Sundry14 0.00 0.00 0.00 0.00 0.00 89,562.50 89,562.50 Referred to Debt Management Sundry15 0.00 0.00 0.00 8,500.00 17,000.00 63,669.00 89,169.00 Referred to Debt Management

4,451,010.83 166,566.12 1,495,074.96 4,925,770.02 99,014.08 799,987.73 11,937,423.74

Percentage of total debt 21% 7% 52% 49% 3% 12% 26%

Finance Revenues Slide 15 Sundry Debt: Adult Care Debt

 The introduction of the Care Act 2014 (effective from April 2015) changed the way care was being charged and the powers local authorities had in relation to collecting these debts.

 Previously a charge could be made against a service users property with or without their consent (HASSASSA). Now this can only be done as part of a Deferred Payment Agreement Page 48 Page (DPA) which must be agreed by the service user.

 The Care Act debt guidance recommended personal contact as the initial stage of recovery to ascertain reasons for non- payment.

 The guidance also recommended the recovery of care debt should be embedded within the social care teams to ensure effective liaison with social care practitioners maintain adequate records to support a debt to be recovered.

Finance Revenues Slide 16 The Future Page 49 Page

Finance Revenues Slide 17 Action Plan

 Review of Corporate Finance system functionality by new support partners – September 2019

 Re-write of sundry debt workflow within Corporate Finance system in line with 2017 Debt Hot House – December 2019

 Review of sundry debt write off procedures including system Page 50 Page processing – December 2019

 Development of Legal Debt Recovery module in test environment – January 2020

 Implementation of bad debt provision within cost centres – August 2019

Finance Revenues Slide 18 Action Plan continued

 Improvement to system reporting and creation of standard report templates - ongoing

 Continued resource within Adult Social Care allocated to issues relating to invoicing and payment to become integral to assessment process Page 51 Page  Design a training model to support the delivery of training users in functionality and best practice on all Corporate Finance modules – to be implemented in 2020

 Consideration to extend the Ethical Approach to Enforcement project to apply to Sundry Debt after implementation within Council Tax – decision due to be made in 2020

Finance Revenues Slide 19 Appendix 2: Debt Current State Assessment

BILLING / INVOICING AND RECOVERY PROCESS AND ANALYSIS: COUNCIL TAX Background Circa 200k annual bills were issued for 2019/20, totalling some £255m with the majority of citizens paying over 10 monthly instalments, from Apr 2019 through to Jan 2020. Bills highlight the various exemptions and discounts available alongside the council tax reduction scheme. Where a citizen contacts the Council they are able to speak with an officer who will, if appropriate, suggest that the citizen contacts a third party advice agency if they are suffering from financial vulnerability.

Recovery Process The process for recovering unpaid council tax is governed by legislation which lays out the minimum time periods that must elapse before the next stage of recovery action can be taken. Legally, it is possible to issue a reminder immediately an instalment remains unpaid although in practice it is more effective to issue a reminder notice just before the next instalment falls due. Where the sum due on the reminder notice is paid within seven days then the citizen is able to continue paying instalments under the original scheme. Where an instalment remains unpaid a second time then a further reminder would be issued. Again the citizen is able to continue making payments under their original instalment scheme where the sum due on the reminder notice is paid. If there is a further failure to pay an instalment then a final notice is issued requesting that the full remaining balance for the current bill to be paid in full. If payment is not made following the issue of either reminder notice or the final notice then, after a period of fourteen days from date of issue, a summons may be issued requiring the citizen to appear before the Magistrates Court to explain why payment has not been made as demanded.

Where a liability order is granted at the Magistrates Court there are a number of recovery options available. These include attachment to earnings or benefit (including universal credit), application for a charging order (and orders for sale), insolvency or committal action. In a number of cases enforcement agents will be asked to collect the sum due where it has not been possible to take alternative action or where it has not been possible to contact the citizen.

Analysis The chart at fig. 1 below shows annual billing liability, the balance brought forward and in year collection performance for the years 2013/14 to 2019/20 inclusive. The arrears figures are taken from end of year reports; any costs are not included but credits are included. Write offs are displayed separately and the total annual billing and arrears figures have been reduced accordingly. Fig. 2 shows the top 15 sums outstanding by value along with the current recovery process.

1 | Page Page 52 Fig. 1

In Progress

CTAX - Top Fifteen Debts by Value Acc Number Debt Position CTax01 £ 23,451.38 Insolvency proceedings commenced CTax02 £ 14,023.25 Charging Order pending CTax03 £ 12,801.00 Charging Order pending CTax04 £ 11,830.02 Charging Order pending CTax05 £ 11,078.06 Query over liability CTax06 £ 11,041.19 Enforcement agent CTax07 £ 10,646.99 Committal application Fig. 2 CTax08 £ 10,491.93 Deductions from benefit CTax09 £ 10,362.03 Arrangement CTax10 £ 10,315.33 Arrangement CTax11 £ 10,112.94 Insolvency proceedings commenced CTax12 £ 10,109.99 Charging Order pending CTax13 £ 9,922.67 Liability query CTax14 £ 9,855.10 Committal application

2 | Page Page 53 BILLING / INVOICING AND RECOVERY PROCESS AND ANALYSIS: BUSINESS RATE Background Circa 16k annual bills were issued for 2019/20, totalling some £238m with the majority of ratepayers paying over 10 monthly instalments, from Apr 2019 through to Jan 2020. Bills highlight the various exemptions and reliefs available. Where a ratepayer contacts the Council they are able to speak with an officer who will, if appropriate, suggest that the citizen contacts a third party advice agency if they are suffering from financial vulnerability and who will also be able to discuss the Enterprise Zones and Areas.

Recovery Process The process for recovering unpaid business rate is governed by legislation which lays out the minimum time periods that must elapse before the next stage of recovery action can be taken. Legally, it is possible to issue a reminder immediately an instalment remains unpaid and, due to the large sums that can be due for each instalment, recovery processes are robust.

Where an instalment remains unpaid, a reminder notice is issued; if the sum due is paid within seven days then the ratepayer is able to continue paying instalments under the original scheme. Where an instalment remains unpaid a second time then a final notice would be issued requesting the full remaining balance for the current bill to be paid in full. If payment is not made following the issue of either reminder notice or the final notice then, after a period of fourteen days from date of issue, a summons may be issued requiring the ratepayer to appear before the Magistrates Court to explain why payment has not been made as demanded.

Where a liability order is granted at the Magistrates Court there are a number of recovery options available. These include insolvency or committal action. In a number of cases enforcement agents will be asked to collect the sum due where it has not been possible to take alternative action or where it has not been possible to contact the ratepayer. By agreement it is also possible to enter into ‘security for unpaid rates’ whereby recovery action in respect of any sums due immediately (including costs) plus any sums which fall due within the specified period (maximum of three years) is suspended to allow the ratepayer time to make payment of the full sum due.

It is possible to commence proceedings for unpaid business rate in the County Court and, where this happens, the full remit of recovery powers become available including charging orders (and orders for sale) and high court enforcement officer activity.

Analysis The chart at fig. 3 below shows annual billing liability, the balance brought forward and in year collection performance for the years 2013/14 to 2019/20 inclusive. The arrears figures are taken from end of year reports; any costs are not included but credits are included. Write offs are displayed separately and the total annual

3 | Page Page 54 billing and arrears figures have been reduced accordingly. Fig. 4 shows the top 15 sums outstanding by value along with the current recovery process.

Fig. 3

In Progress

Business Rates - Top Fifteen Debts by Value Acc Number Debt Position NDR01 £ 202,918.18 Enforcement agent NDR02 £ 193,584.38 Summons NDR03 £ 162,540.00 Summons NDR04 £ 152,234.50 Arrangement NDR05 £ 147,509.50 Query NDR06 £ 137,340.00 Summons NDR07 £ 133,560.00 Summons NDR08 £ 110,880.00 Summons NDR09 £ 102,312.00 Summons NDR10 £ 97,510.72 Query Fig. 4 NDR11 £ 93,744.00 Summons NDR12 £ 92,321.50 Enforcement agent NDR13 £ 86,121.86 Summons NDR14 £ 81,401.50 Arrangement NDR15 £ 79,911.75 Committal action

4 | Page Page 55 BILLING / INVOICING AND RECOVERY PROCESS AND ANALYSIS: OVERPAID HOUSING BENEFIT Background Housing benefit is delivered by the Council to some 40k households on behalf of the Department for Work and Pensions. The Council receives subsidy for any loss incurred due to overpayments on a sliding scale from 100% to NIL%. There are four main categories of overpayment:

 Eligible overpayments - those where either the citizen is at fault (intentionally or otherwise) or no particular party is to blame. The Council receives 40% of expenditure as subsidy.  Council error overpayments - those where the local authority is to blame for the overpayment, either through an act or omission. The Council receives subsidy at NIL% of expenditure (but see below) o Subsidy if Council error overpayments does not exceed lower threshold - 100% o Subsidy where Council error between the lower and upper thresholds - 40% o Subsidy where Council error exceeds upper threshold - 0% (Where the lower threshold is 0.48% of correct total expenditure, and upper threshold is 0.54% of correct total expenditure.)  Technical overpayments - those arising because some benefit (in particular Rent Rebate) is paid in advance. The Council receives subsidy NIL% of expenditure.  DWP error - those arising because of a mistake made by DWP. The Council receives 100% if not already recovered by DWP, if so, 0%

The Council received £504k Council error subsidy for 2018/19 as the total Council error in value was less than the lower threshold of £735k.

There is no impact on subsidy if the overpayment is recovered after being invoiced direct to the citizen where they are no longer in receipt of housing benefit or another welfare benefit. Additionally, if the Council decides to ‘write-off’ the sum due, even prior to an invoice being raised, the Council will receive the appropriate percentage subsidy for that overpayment.

It is possible for the Council to receive 100% subsidy on an overpayment, and also recover 100% of that overpayment which means the Council would make a surplus. Also, an underpayment of benefit could offset an existing overpayment (if in the same year) and the Council receive NIL% subsidy if the overpayment is offset in full or the appropriate percentage in subsidy for the remaining overpayment.

Council Error, despite usually being caused by the Council, can be recovered from the citizen in certain circumstances.

5 | Page Page 56 Circa 12k invoices were issued in 2018/19 with a value of £12m, with 2k so far this year for a value of £2m. All invoices request payment in full within seven days but offer the opportunity to speak with an officer and suggest that the citizen contacts a third party advice agency if they are suffering from financial vulnerability.

It is common for citizens to have their entitlement to housing benefit removed, with an invoice being sent for any overpaid sum, and then that invoice being cancelled as deductions could be made from welfare benefits (including pension credit, state retirement pension and universal credit amongst others) or direct from a new or revised entitlement to housing benefit. This paper does not refer to debts which are not collected via invoice.

The continued rollout of universal credit presents challenges to the collection of this debt type as the priority of overpaid housing benefit in terms of the hierarchy of deductions from welfare benefits is reducing.

Recovery Process The process for recovering overpaid housing benefit is governed by legislation in some respects but, where no legislative direction exists, each invoice is treated as a separate sundry debt.

Where a debt is created an invoice is issued and, where payment is not forthcoming nor arrangement to pay made, a final notice is issued after a further twenty one days. Again where payment is not forthcoming nor arrangement to pay made, the debt is passed to a collection agent for recovery action to commence.

Where collection agent activity is unsuccessful consideration is made as to the suitability and potential for further recovery action via the County Court. Where a debt is considered viable for further action and a County Court Judgement obtained, a number of recovery options are available. These include charging order (and order for sale), insolvency, third party payment order and County Court enforcement officer or high court enforcement officer action.

Analysis The chart at fig. 5a & fig. 5b below shows the brought forward arrears, the value of invoices raised per year and in year collection performance for the years 2017/18 to 2019/20 inclusive. The arrears figures are taken from end of year reports. Please note that collection performance is measured against target rather than against total sum outstanding. Write offs are displayed separately and the total arrears figures have been reduced accordingly. Fig. 6 shows the top 15 sums outstanding by value along with the current recovery process.

6 | Page Page 57 Fig. 5a

Fig. 5b

7 | Page Page 58 Overpaid Housing Benefit - Top Fifteen Debts by Value Inv Number Debt Position OPHB01 £ 54,098.32 Collection agent OPHB02 £ 52,577.51 Collection agent OPHB03 £ 50,207.74 Deductions from benefit OPHB04 £ 39,880.00 CCJ OPHB05 £ 37,536.00 Arrangement

OPHB06 £ 35,154.34 Deductions from earnings Fig. 6 OPHB07 £ 33,732.35 Arrangement OPHB08 £ 32,666.03 Collection agent OPHB09 £ 31,923.78 Deductions from benefit OPHB10 £ 31,500.00 Arrangement OPHB11 £ 28,988.93 Arrangement OPHB12 £ 28,880.96 Compensation Order OPHB13 £ 28,782.07 Deductions from earnings OPHB14 £ 26,620.26 Employment details requested

OPHB15 £ 26,085.00 Employment details requested

8 | Page Page 59 BILLING / INVOICING AND RECOVERY PROCESS AND ANALYSIS: SUNDRY DEBT (ACCOUNTS RECEIVABLE) Background Circa 113k invoices were issued in 2018/19 with a value of £133m, with 28k so far this year for a value of £39m. All invoices request payment in full within thirty days but offer the opportunity to speak with an officer and suggest that the citizen contacts a third party advice agency if they are suffering from financial vulnerability.

Recovery Process The process for recovering unpaid sundry debt invoices is not governed by legislation, save that legal action is taken in the County Court. There is the option to charge late payment fees and interest to some customer types, for which the sums to be charged are covered by legislation.

To enable automation within the recovery process invoicing is designed around ‘Collection Codes’. A collection code sets the rules in relation to reminders (the Dunning process) and interest charges. Having multiple collection codes enables varying reminder cycles that suit the different types of charges being collected that would not be considered as standard, i.e. care debt, commercial rent, service charges etc. Each reminder cycle will then set out the number and frequency of reminders to be issued. Any invoices issued under the standard collection code (CC1) would have reminders sent after 42 and 56 days respectively if the invoice remains unpaid. Reminders are produced on a daily basis in accordance on the full range of collection codes.

Fourteen days after the last reminder has been sent, budget managers are notified and asked to confirm the validity of debt. At this point the invoice debt is referred to debt management for collection and a final notice is issued. After an additional fourteen days, if the invoice remains unpaid, the debt is referred to a collection or enforcement agent as required or legal action commenced. Where a debt is considered viable for further action and a County Court Judgement obtained, a number of recovery options are available. These include charging order (and order for sale), insolvency, third party payment order and County Court enforcement officer or high court enforcement officer action.

Adult Care Debt The introduction of the Care Act 2014 (effective from April 2015) changed the way care was being charged and the powers local authorities had in relation to the collection of these charges. Previously the Council were able to place a charge against a service users property with or without their consent (HASSASSA) but this changed under the Care Act 2014 so that a charge can only be placed on a property as part of a Deferred Payment Agreement (DPA) which must be agreed with the service user.

Furthermore Care Act guidance on debt recovery recommended personal contact as the initial stage of recovery to ascertain reasons for non-payment and that this activity should be embedded within the social care teams to

9 | Page Page 60 ensure effective liaison with social care practitioners and maintain adequate records to support a debt to be recovered.

The invoicing and recovery process is therefore slightly different for collection codes CC2 and CC3, Care and Homecare respectively. Invoices are issued and distributed to Service Users or their agents via either email or post and an initial period of fourteen days is allowed for citizens to either contact the Council to query the invoice or make payment. After the initial period invoices are referred to the Adult Social Care (ASC) debt team for action in line with the recommendations of the Care Act 2014. If required up to three reminder letters could be issued.

Any invoices which remain unpaid at this point and which are not subject to query, arrangement etc. are referred to debt management for collection under the following circumstances:  Citizen in care with a vacant property; or  Deceased estate not administered correctly; or  Deputy or appointee not acting in accordance with their fiduciary duties; or  Citizen no longer receiving care; or  Invoice relates to a body corporate.

Where a debt is considered viable for further action and a County Court Judgement obtained, a number of recovery options are available. These include charging order (and order for sale), insolvency, third party payment order and County Court enforcement officer or high court enforcement officer action. Legal services will be engaged to undertake activity relating to deputy or appointee cases or where an executor has failed to discharge their duties correctly.

Write Offs As part of the final accounts a bad debt provision is calculated for Sundry Debt, the provision for 2019/20 was calculated to be £12.47m. The calculation is based on the age of a debt using the following formula:

10 | Page Page 61 The provision is held on the corporate balance sheet but the debts when written off are against the original departmental cost centre. All write offs are carried out in accordance with the Council’s financial regulations; section 6.2.1.

The value of write offs in recent years has been the equivalent of less than 1% of the annual debit raised although there is an issue at present as there is a currently a backlog due to the prescriptiveness of financial regulations.

Recent History The current Unit 4 Business World (ABW) System was implemented on 1st April 2013, part of the package included the licensing for the Legal Debt Recovery (LDR) module which is designed to manage a debt through the Legal phase of recovery and this module was scheduled for implementation after the initial go-live.

As part of the Corporate Saving plan in 2014 when the Council needed to make substantial savings the Finance service review saw the deletion of the Recovery team from the area that is now known as Finance Operations effectively leading to the reduction in the staff base to its current size of 7 full time equivalents.

In September 2017 the Final Audit report was issued identifying a partial level of control in relation to Sundry Debt collection. In response to this a Hot House was held in December 2017 to address the debt position and agree the future process. Outcomes from this included the workflow process revision, the implementation of an Adult Social Care (ASC) debt team and the role of the Debt Management team.

In February 2018 the ASC debt team was established as part of a project team funded for 12 months. During 2018 several workarounds have been developed to enable the referral of debts for further action with mixed results. Those based on the referral to Debt Management have proved to be effective whilst the reports to Budget Holders have proven to be in-effective to date.

In February 2019 the ASC debt project team were released as funding had ended. The review of the project showed the team had identified issues within the process leading to the issue of invoices that needed to be resolved within the People Directorate and whilst they had also had limited success in reducing the debt position they had shown signs of reversing the overall trend of increasing care debt.

Analysis The chart at fig. 7 below shows annual debits by year, the balance brought forward and in year collection performance for the years 2013/14 to 2019/20 inclusive. The arrears figures are taken from rolling year reports as at end of March each year. Write offs are displayed separately and the total annual debits and arrears figures have been reduced accordingly. Fig. 8 shows the top 15 sums outstanding by value along with the current

11 | Page Page 62 recovery process position. Fig. 9 shows some detail around when invoices were paid (by days) and the level of outstanding invoices.

Fig. 7

In Progress

Fig. 8

12 | Page Page 63

Fig. 9

13 | Page Page 64 BILLING / INVOICING AND RECOVERY PROCESS AND ANALYSIS: PARKING SERVICES Background Circa 150k Penalty Charge Notices (PCN’s) are issued on a yearly basis with the average sum that could be collected (at maximum face value) being £4.5m. All PCN’s are payable within 28 days at a discounted rate of the full amount thereafter.

Recovery Process The process for recovering unpaid PCN’s is governed by legislation and is laid out below: Lifecycle of a PCN & values charged at various stages of the Higher Rate Lower Rate Bus Lane process. Parking PCN Parking PCN PCN Value when issued to vehicle. £70.00 £50.00 £60.00 Driver has 14 days from date of issue to pay at the discounted £35.00 £25.00 £30.00 rate (statutory 50% discount). Driver has additional 14 days to pay at full rate after discount £70.00 £50.00 £60.00 period has expired. Formal Notice To Owner is issued (28 days after date of issue) to £70.00 £50.00 £60.00 the Registered Keeper who has 28 days to pay at the full rate. Formal Charge Certificate is issued (56 days after the date of issue) to registered keeper which increases the charge by 50% of £105.00 £75.00 £90.00 the original value. Registered Keeper has 21 days to pay at this rate. After this time (76 days from date of issue) the debt is registered with the Traffic Enforcement Centre at Northampton County Court and an Order for Recovery is made to the registered £113.00 £83.00 £98.00 keeper. The Court Fee of £8 is added to the debt. Registered Keeper has 21 days to pay the Council at this rate. After this time, (97 days from date of issue) the debt is passed to Enforcement Agents (EA) who have 12 months to execute the Warrant and collect the debt. At this time the Registered Keeper can no longer pay the Council and must pay the fine plus any additional fees levied by the EA to the EA. The EA remits the PCN value to us and retains any additional fees that they have £113.00 (plus £83.00 (plus £98.00 (plus levied. Cases not recovered by the EA are written off at the end EA fees) EA fees) EA fees) of the 12 month period.

The current enforcement agent contract guarantees a recovery rate of 55% of all recoverable debt (by value).

Analysis The chart at fig. 10 below shows the annual liability of PCN’s issued, the balance brought forward and in year collection performance for the years 2013/14 to 2019/20 inclusive. The arrears figures are taken from end of year reports. Write offs are displayed separately and the total annual liability and arrears figures have been reduced accordingly.

14 | Page Page 65 Fig. 10

In Progress

It must be noted that PCN income raised is based on the discounted rate that has to be offered as part of the statutory process. Analysis shows that upwards of 80% of PCNs are paid at this discounted rate. The total arrears brought forward figure shows unpaid PCN’s at face value, i.e. unadjusted as they have remain unpaid past the deadlines for the discounted rate.

Average lifecycle of a PCN is 18 months, so the collection percentage shown is the total number of paid PCNs over the full lifecycle period. Cases from 2017/18 and 2018/19 are still ongoing hence the current, lower, collection rate.

15 | Page Page 66 BILLING / INVOICING AND RECOVERY PROCESS AND ANALYSIS: LOCAL AUTHORITY DOMESTIC RENT Recovery Process The process for recovering former tenant debt is the same as that for any other sundry debt. Where a debt is created an invoice is issued and, where payment is not forthcoming nor arrangement to pay made nor an arrangement to pay made, the debt is passed to a collection agent for recovery action to commence. The Rent and Income Management service currently use Moorcroft Debt Recovery to recover bad debt. This is due to end in September 2019 and the Debt Management team based in Revenues will take over this work. This is debt for which initial trace attempts have been made within the team.

The revised process will see a final notice issued in respect of each invoice before referral to collection agents currently used for the recovery of sundry debt and overpaid housing benefit. Where collection agent activity is unsuccessful cases will be passed back to the Rent and Income Management service for further action.

Analysis The table at fig. 11 and graph at fig. 12 below show the current level of outstanding arrears and invoices remaining unpaid for the years from 2013 onwards in relation to Housing Rent Account (HRA) debts. The figures are up to date as at 31 Aug 2019.

There are currently 9,515 former tenant accounts totalling £4.3m; these accounts include a mixture of General fund managed accounts and HRA accounts. Of these accounts 1,765 are over six years old totalling £782k. Further analysis has been carried out to break this down into HRA managed accounts, these total 7,053 accounts totalling £3.8m, of these 23% are over six years old (£757k).

Currently an internal audit is being carried out within the Rents and Income Management team with the report due to be completed by end of September. This audit has focussed in part on former tenant debt and the write off process and will form part of an action plan to deal with aged and realistically unrecoverable debt via write off and recovery going forward which will be agreed with the Director of Housing and Landlord Services.

16 | Page Page 67 Fig. 11

Sum Outstanding Sum Outstanding Age of Debt (HRA) Count (No.) Count (%) (HRA) (HRA) (%) Six years + 1,655 23% £757,392.94 20%

2013/14 453 6% £177,872.58 5%

2014/15 418 6% £190,728.52 5%

2015/16 509 7% £355,381.14 9%

2016/17 768 11% £610,704.43 16%

2017/18 801 11% £521,517.34 14%

2018/19 1,838 26% £969,589.16 25%

2019/20 611 9% £224,247.47 6%

Grand Total 7,053 100% £3,807,433.58 100%

Fig. 12

17 | Page Page 68 Agenda Item 11 Resources Scrutiny Commission 18th September 2019

Report of: Denise Murray, Service Director Finance

Title: 2019/20 Period 3/ 4 Forecast Outturn Report – Resources Extract

Ward: N/A

Officer Presenting Report: Denise Murray, Service Director Finance

Contact Telephone Number: 0117 35 76255

Recommendation:

That the Commission considers and comments on the relevant Resources extracts taken from the 2019/20 Period 3/ 4 Forecast Outturn Report that went to Cabinet on 3rd September 2019.

Page 69 Appendices:

Appendix 1 – Cabinet Report Exec Summary Appendix A – P03 Budget Monitor Report Appendix B – Budget Monitor Summary Appendix C – P3 Appendix 2 Resources

LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 Background Papers:

None

Page 70 Decision Pathway – Report

PURPOSE: Key decision

MEETING: Cabinet

DATE: 03 September 2019

TITLE 2019/20 Period 3/ 4 Forecast Outturn Report

Ward(s) n/a Author: Tian Ze Hao Job title: Senior Finance Business Partner Cabinet lead: Cllr Craig Cheney Statutory Officer lead: Denise Murray Proposal origin: Other Decision maker: Cabinet Member Decision forum: Cabinet Purpose of Report: This report provides the update on the Council’s financial performance and forecast use of resources for the financial year 2019/20 and includes forecast movement encompassing Period 3 & 4. The Council’s budget for 2019/20 was agreed by Council on 26th February 2019 and this report focuses on the forecast position against the latest budget.

The Council operates Directorate cash limited budgets and Executive Directors are responsible for ensuring that appropriate action is taken to contain both revenue and capital spending within the directorate’s overall budget limit. Budget holders forecasting a risk of overspend should in the first instance set out in-service options for mitigation. Where these are considered undeliverable or pressures cannot be contained across the directorate the budget scrutiny process will be triggered and a request may be made for the Executive to consider granting a supplementary estimate redirecting funds from an alternative source.

At this stage of the year Directors are anticipating that a range of management actions being proposed will enable key service requirements to be delivered and a balance budget position achieved. This position and proposed mitigations will be closely monitored and reported.

Evidence Base: The Council’s overall annual revenue spend for 2019/20 covers a number of areas:  The General Fund net budget of £376.3m (a forecast variation at P4 of £2.8m), providing revenue funding for the majority of the Council services.

Ring Fenced Accounts:  The Housing Revenue Account (HRA) of £160.0m gross spend (no forecast variation at P4), is ring-fenced, money received in rent in order to plan and provide services to current and future tenants, and is managed within Growth and Regeneration Directorate.  The Dedicated Schools Grant (DSG) of £356.9m (no forecast variation at P4 but with an proposed draw-down of £1.7m from Reserves ), which is a ring-fenced grant that must be used in support of the schools budget as defined in the School and Early Years Finance Regulations and cannot be used for any other purpose. The grant is managed within the People Directorate;  Public Health, a ring-fenced grant of £31.6m (with a forecast variation of £0.7m at P4), must be spent to support the delivery of the Public Health Outcomes Framework exclusively for all ages and is managed within the People Directorate. Full detail for each of these areas is provided in the main monitoring report, Appendix A.

Capital Programme: Page 71 1  Revised capital Programme of £251.0m for 2019/20 (forecast variation at P4 £33.2m), fully funded through the use of external funding, capital receipts and borrowing.

Reserves:  General Reserve - £20.0m (forecast movement at P4 £3.2m reallocated to one-off strategic spend)  Earmarked Reserve - £78.7m (forecast movement at P4 £2.5m – comparing to £81.2m in prior period)

Recommendations: That Cabinet approve, 1. The allocation of general reserves and reallocation of earmarked reserves to those areas as set out in Appendix A Figure 5-7. 2. The addition, removal and re-profile of a list of schemes under the capital programme, details set out in Appendix B Figure 2. That Cabinet note, 3. A risk of overspend on General fund services of £2.8m for 19/20 representing 0.8% of the approved budget (Appendix A). 4. A forecasted balanced position with regard to the Housing Revenue Account. 5. A forecasted balanced position for the Dedicated Schools Grant taking into account the planned drawn-down from reserves at £1.7m. 6. The latest available DSG funding allocations from ESFA, which include an additional £0.7m in the High Needs block and a reduction of £0.17m for the Early Years block. 7. A risk of overspend of £0.7m for Public health, which is being monitored. 8. A forecast £33.2m underspend on the capital programme, albeit run-rate is more than 50% behind the curve. 9. a list of change requests under the savings programme Appendix A Figure 4 10. The Sundry Debt position of £19.2m over 90days as at Period 4. Individual directorate detail included under Appendix A1-6. Corporate Strategy alignment: This report sets out progress against our budget, part of delivering the financial plan described in the Corporate Strategy 2018-23 (p4) and acting in line with our organisational priority to ‘Be responsible financial managers’ (p11). City Benefits: Cross priority report that covers whole of Council’s business. Consultation Details: n/a

Revenue Cost See Above Source of Revenue Funding Various Capital Cost See Above Source of Capital Funding Various One off cost ☐ Ongoing cost ☐ Saving Proposal ☐ Income generation proposal ☐

Required information to be completed by Financial/Legal/ICT/ HR partners: 1. Finance Advice: The resource and financial implications are set out in the report. Finance Business Partner: Michael Pilcher (Chief Accountant) 2. Legal Advice: There are no direct legal implications arising from this report. The report, including the detail in the appendices will assist the Cabinet to monitor the budget position with a view to meeting the Council’s legal obligation to deliver a balanced budget. Legal Team Leader: Nancy Rollason, Head of Legal Service 22nd August 2019 3. Implications on IT: There are no IT implications arising from production of this report. IT Team Leader : Ian Gale, Head of IT 4. HR Advice: Expenditure on staffing is monitored on a monthly basis by budget holders. Managers are required to manage expenditure within the agreed staffing budget that has been set for 2019/20.

Page 72 2 HR Partner: Mark Williams, Head of Human Resources EDM Sign-off Denise Murray Cabinet Member sign-off Cllr Cheney CLB Sign-off 20th August 2019 For Key Decisions - Mayor’s n/a Office sign-off

Appendix A – P4 Revenue Budget Monitoring Report YES Appendix B – P4 Capital Budget Monitoring Report YES Appendix C – Summary of any engagement with scrutiny NO Appendix D – Risk assessment NO Appendix E – Equalities screening / impact assessment of proposal NO Appendix F – Eco-impact screening/ impact assessment of proposal NO Appendix G – Financial Advice NO Appendix H – Legal Advice NO Appendix I – Combined Background papers NO Appendix J – Exempt Information NO Appendix K – HR advice NO Appendix L – ICT NO

Page 73 3 APPENDIX A

1. General Fund 1.1. The Council is currently forecasting a £2.8m overspend on the approved general fund budget (£376.3m). At this point of the financial year it is expected that the forecast overspend will be largely managed through management actions through the rest of the financial year. 1.2. The table below provides a summary of the current forecast position by directorate for 2019/20. Additional service details are provided for each Directorate in individual appendices. Figure 1: General Fund Forecast Net Expenditure

Approved Revised Variance Outturn Variance Budget Directorate Budget as % of Net Budget £m £m £m £m 226.6 People 226.9 229.7 2.8 1.2% 50.4 Resources 50.2 50.7 0.5 1.0% 64.3 Growth and Regeneration 62.6 62.5 -0.1 (0.1%) 341.3 Sub-total 339.7 342.9 3.2 0.9% 35.0 Other Budgets* 36.6 36.2 -0.3 (0.9%) 376.3 Net Expenditure Total 376.3 379.1 2.8 0.8% *Other Budgets includes capital financing and borrowing costs, and un-apportioned central overheads.

1.3. The forecast overspend is predominantly within Adult Social Care (£2.2m) meanwhile assuming a level of the planned efficiency initiatives will be delivered in the service against the c£4m target. This forecast has worsened by £0.4m comparing to P2 (no net movement against P3), predominantly relating to hospital and front line team Adult Social Care has seen sharp increases in demand for residential care for over 65s linked with hospital discharges since May 2019. There are also increasing costs in providing residential support to transitioning young people to adulthood and providing support to working age adults in the communities. Contracting arrangements are being reviewed and options are being considered that include changing elements of the payment mechanism. However it must be stated that there is a concern that if the emerging trend for older adults continues, the ability to deliver a balanced budget by the end of the financial year will be unachievable. 1.4. The Education improvement budget is forecasting a risk of overspend of £0.5m. (no change compared to P2 & P3), and principally relating to Home-School Transport. This is a recurrent issue and was addressed by a temporary supplementary estimate in 2018/19. For 2019/20, the service is actively seeking solutions to permanently mitigate this pressure by procuring a new software system to get better management information and to improve route planning; participating in a Department for Education project looking at good practice in Home-School Transport; and jointing up with SEN Capital Strategy to help minimise the need for transport by having provision where it is needed. 1.5. The remaining forecast overspend is within Facility Management in the Resources Directorate. Savings delivery plans are proving challenging with increasing running cost pressures on the Council’s operational buildings. The service is currently exploring options and developing mitigation plans. 1.6. At this point of the financial year a significant amount of budget for the wider council is still forecasted to be spent as a default by budget holders whilst the forecast based on monthly average spend indicates a lower spend profile. Significant efforts are being made by budget holder to improve the forecast accuracy. Further work is still needed on an ongoing basis to ensure that the assumptions match with recruitment plans and any potential vacancy factors are identified. Figure 2 below illustrate the difference between the budget holders’ forecast on employees spend and the Page 74 extrapolated current monthly averages.

Figure 2: Employee cost run-rate comparison to management forecast

205

Millions 200

195

190

185

180

2. Ring-Fenced Accounts Housing Revenue Account 2.1. The HRA is forecasting a balanced position at year-end, comparing to the P2 forecast at£2.4m underspend. The service is putting plans in place to ensure the delivery of the repair and maintenance programme. There are recruitment and retention issues in the Construction industry generally, and the service is seeking to fill vacancies in order to ensure maximum deliverability of the planned programme.

Dedicated Schools Grant 2.2. The total Dedicated Schools Grant (DSG) budget, including amounts recouped by the Education and Skills Funding Agency for Academies is £356.9m for 2019/20. The DSG is currently forecasting an in year balance position with the planned drawn-down from carried forward balances / reserves at £1.7m, which has remained the same level against P2 forecast, but an £0.3m increase against P3 mainly due to early years forecast. 2.3. The approved budget for 2019/20 included use of funding for High Needs in advance (from 2020/21). The DSG brought forward a £1.9m surplus from the previous year. This position needs to be considered in the context of the approved High Needs budget for 2019/20 including £2.4m funding draw down from 2020/21 in advance and £2.5m transferred between blocks (primarily schools). the underlying position for High Needs is a shortfall of c.£5m. The plan for addressing this presently is to lobby government for more resources, to pursue the High Needs Transformation Programme to deliver service improvements and to take any opportunities that present themselves to transfer funding from other blocks or elsewhere and flex the DSG budget to best meet our needs 2.4. Regarding early years DSG income is based on actual take up of places. As the actual number of take up of placements in 2018/19 generated an underspend; if a similar level of participation is reflected in 2019/20 this will generate a £1m underspend in year. At this stage of the financial year, none of the participation data is yet available, It is, too early to determine whether participation levels will be at, below or above 2018/19and the forecast will vary during the year, as this information becomes available.

Page2 75 2.5. Cabinet are asked to note the latest available DSG funding allocations from ESFA, which include an additional £0.717m in the High Needs block and a reduction of £0.176m for the Early Years block and transfers that will be actioned to reflect these funding changes. 2.6.

Public Health 2.7. Public Health is forecasting to deliver a balance budget in 2019/20 which remains consistent with P2 and P3. The total grant receipt of £31.6m included a 2.5% reduction (£0.9m) this year. There is a risk that the agreed 2019/20 budget may be overspent to a value of £0.7m. This is being closely monitored and should this probability increase a supplementary estimate will follow requesting a drawdown of £0.7m from the ring fenced Public Health reserves this year. 3. Savings Programme 3.1. The savings / efficiency programme agreed by Council in 2018 included savings totalling £11.7m for 2019/20. There was also £6.1m of savings with largely one off activity carried forward from 2018/19 to 2019/20 which still require full delivery in 2019/20, therefore increasing the total savings delivery target for 2019/20 is £17.8m. 3.2. At P4 £4m of £17.8m savings are reported to be at risk where further work / mitigating actions may be required in order to deliver. Comparing to P2, this position has improved by £2m (remained same compared to P3), mainly relates to increased certainty in the delivery of savings on non-pay expenditure. Of the £4m savings that still at risk, £2.0m relates to the Adult Social Care Better Lives Programme and the remainder relates to Council-wide cross-cutting savings initiatives. Figure 3: Summary of Delivery of Savings by Directorate

2019/20 Savings 2019/20 Savings reported as 2019/20 Directorate reported as at risk Savings £m safe £m £m % People 8.98 6.90 2.09 23% Resources & Cross-Cutting 4.20 3.27 0.92 22% Growth and Regeneration 4.63 3.41 1.22 26% Total 17.81 13.58 4.23 24%

3.3. Following approval of savings programme at Full Council, saving schemes at risk can be delivered or mitigated in a different way than initially expected. Where savings shortfalls are identified alternative propositions are developed. A summary of these changes request are set out below and Cabinet are asked to note the changes: Figure 4: Change Requests

Page3 76 2019/20 2020/21 2021/22 2022/23 Reference Discription £000 £000 £000 £000

To approve the change to BE1. This was originally going to be delivered from savings through rationalisation of posts, but will now be delivered by alternative specific BE1 ongoing savings within the Directorate, including IT system changes, election budget reduction, and improved treasury management. 250 500

To note change to IN25 saving by removing the proposal for charging admissions for Red Lodge and Georgian House Museums for savings purposes. The saving will IN25 therefore be delivered via increased income from events, sponsorship and self- financing of Bristol Film Office 60 19 35 21

To note change to IN30. Income from can do Bristol is changed to off-street parking IN30 income for 2019/20 recurrent delivery

20 Total 330 519 35 21 3.4. Members should note that delivery of savings is based on Directors assessment of whether the savings agreed by Council have been delivered and whilst other areas of underspends and income generation is being realised within budgets, until this is reallocated via a formal change control process the savings delivery tracker and forecast outturn will not be aligned.

4. Position of Reserves 4.1. The 2018/19 accounts closed with a surplus of £3.2m held in the general unallocated reserve subject to in-year spending decisions and emerging pressures and priorities. Based on the revised net budget for 2019/20 this surplus takes the general unallocated reserve balance just above the 6% policy threshold. 4.2. Outlined in Figure 5 below are priority one-off growth / investments requested totalling £3.2m and approval is sought for this allocation to be made from the above mentioned general unallocated reserve, which will reduce this reserve to the agreed level of £20m. Within the figure above, Cabinet is asked to note urgent virement decisions made under Mayors delegated authority (and subsequent Officer Executive Decision) from the general unallocated reserve in order to facilitate timely delivery. Further detail is found in Appendixes individual supplementary estimate requests and OEDs published. 4.3. As a result of the end of year position, during the first quarter of 2019/20 further reviews were carried out on the earmarked reserves (totalling £81.2m) to ascertain whether any of the obligations had been discharged, or were no longer required and could be released or redirected. Following this review £3.5m was identified. Figure 6 below summarise the one-off strategic spend during the 2019/20 financial year that are proposed to be funded by the redirection of earmarked reserve totally £3.5m and Cabinet approval is sought for this movement.

Figure 5: 19/20 proposed priority one-off growth / investment and funding

Page4 77 Funded by Funded by Redirection of Strategic One-off Spend Total One-off General Earmarked Requests Reserve Reserves Decision Route £000 £000 £000 Serious violence, contextual safeguarding and community tension 875 875 Supplementary estimates Clean Streets proposal 845 845 Supplementary estimates Ethical debt project 600 600 Cabinet Report 3rd September Carbon Neutrality Funding 250 250 Supplementary estimates Clean Air 312 150 162 Supplementary estimates Bristol Family Cycling Centre 155 155 Supplementary estimates Bristol Pound 50 50 Officer Exec Decision Published Mental heath and well being programme - Thrive 50 50 Officer Exec Decision to be published Going for Gold 25 25 Officer Exec Decision to be published Fair Saturday - Art & Culture Festival 25 25 Officer Exec Decision to be published Holiday Hunger Appeal 25 25 Officer Exec Decision Polished Avon Mutual - Regional Community Bank 150 150 Prior Cabinet Approval Network and Cyber Security 1,000 1,000 Supplementary estimates Bristol housing festival 150 150 Supplementary estimates Western Powerhouse 50 50 Supplementary estimates

Total Funded by 18/19 Underspend 4,562 3,200 1,362

Amount Held in abeyance in risk reserve in dealing with emerging 2,193 2,193 revenue pressures in 2019/20

Total 6,755 3,200 3,555 *

4.4. For approval, Figure 6 below sets out, the proposed redirection of existing earmarked reserves and a transfer of the balance of £2.2m to increase the risks reserve for emerging 2019/20 in year pressure that may not be fully contained. Figure 6: Reallocation of earmarked reserves

Balance to be Released / Mayoral BHL / Weston Release to risk Type Analysis Analysis(T) reapplied Pledges Powerhouse Cyber Security reserve Technical BX119 IFRS - Grants with no conditions 321,340 (321,340) Risk BX123 Operational Reserve 748,717 (748,717) Risk BX160 Education Risk Reserve (Contingency Released) 1,523,751 (1,000,000) (523,751) Risk BX151 Future Risk (saving consultation reserve) 51,467 (51,467) - Service BX072 Development Fund 228,838 (80,685) (148,153) Service BX074 Housing Support 35,100 (35,100) - Service BX125 Bristol Green Capital 94,000 (94,000) - Service B2002 Future City Demonstrator 451,473 (451,473) Service B4004 Planning 11,412 (11,412) - Service B4006 Transport 5,121 (5,121) - Service B4007 Housing Delivery 84,215 (84,215) - Total 3,555,434 (162,000) (200,000) (1,000,000) (2,193,434)

4.5. Other movements on reserves: it should be noted that In July £2.5m of funding was invested into Bristol Energy in line with the planned draw-down.

Page5 78 Period 4 Budget Monitoring - Summary

2019/20 - Full Year

Approved Budget Revised Budget Forecast Outturn Outturn Variance

£000s £000s

People

Adult Social Care 148,805 148,998 151,157 2,159

Children and Families Services 62,439 62,436 62,477 40

Educational Improvement 12,103 12,274 12,833 559

Public Health - General Fund 3,237 3,237 3,238 2

Total People 226,584 226,945 229,705 2,760

Resources

Digital Transformation 12,130 12,168 12,168 0

Legal and Democratic Services 6,898 6,808 6,726 (82)

Finance 10,947 10,970 10,969 (1)

HR, Workplace & Organisational Design 10,568 10,390 10,205 (185)

Policy, Strategy & Partnerships 2,939 3,035 3,036 2

Commercialisation & Citizens 6,915 6,806 7,556 751

Total Resources 50,396 50,176 50,660 484

Growth & Regeneration

Housing & Landlord Services 11,600 11,597 11,533 (64)

Development of Place 1,277 1,285 1,282 (3)

Economy of Place 2,702 3,040 3,042 2

Management of Place 48,709 46,671 46,680 9

Total Growth & Regeneration 64,288 62,593 62,538 (56)

SERVICE NET EXPENDITURE 341,268 339,714 342,902 3,188

Levies 857 857 860 3 Corporate Expenditure 34,174 35,323 34,978 (345) Capital Financing 0 405 405 0 Insurance Fund 0 0 0 0 Corporate Revenue Funding (376,299) (376,299) (376,299) 0 RELEASED FROM RESERVES 0 0 0 TOTAL REVENUE NET EXPENDITURE (0) (0) 2,847 2,847

HOUSING REVENUE ACCOUNT SUMMARY 2019/20 - Full Year Approved Budget Revised Budget Forecast Outturn Outturn Variance

£000s £000s Housing Revenue Account Strategy, Planning & Governance (102,687) (102,687) (103,569) (882) Responsive Repairs 26,192 26,192 26,895 703 Planned Programmes 18,095 18,095 18,983 887 Estate Management 9,408 9,408 8,699 (710) Capital - Neighbourhoods HRA 0 0 1 1 HRA - Funding & Expenditure 11,745 11,745 11,745 0 HRA - Capital Financing 11,617 11,617 11,617 0 HRA - Year-end transactions 25,630 25,630 25,630 0 Total Housing Revenue Account 0 0 0 0

RING FENCED BUDGETS 2019/20 - Full Year Approved Budget Revised Budget Forecast Outturn Outturn Variance

£000s £000s

Public Health 0 0 0 (0)

Dedicated Schools Grant (0) (0) 0 0

Total Ring fenced budgets (0) (0) 0 0 Page6 79 Appendix A2 Bristol City Council - Resources P04 2019/20 – Budget Monitor Report a: 2019/20 Summary Headlines Revised Budget Forecast Outturn Outturn Variance

P4 £50.2m £50.7m £0.5m OVERSPEND

b: mBudget Monitor

1. Revenue Position By Division 2019/20 - Full Year Approved Revised Forecast Revenue Position by Division Outturn Variance Budget Budget Outturn £000s Digital Transformation 12.1 12.2 12.2 0.0 Legal and Democratic Services 6.9 6.8 6.7 (0.1) Finance 10.9 11.0 11.0 (0.0) HR, Workplace & Organisational Design 10.6 10.4 10.2 (0.2) Policy, Strategy and Partnerships 2.9 3.0 3.0 0.0 Commercialisation and Citizens 6.9 6.8 7.6 0.8 Total 50.4 50.2 50.7 0.5

Commercialisation and Citizens – Includes Facilities Management £1.0m forecast over spend representing risk to b/f 18/19 underachieved savings in addition to 19/20 additional savings target. This forecast overspend has increased since P3 by £0.2m reflecting savings challenges re-assigned and transferred from Growth and Regeneration Property.

2. Overall Position and Movement

Forecast Outturn Variance 2019/20 £000 Revised budget May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar £50.2m 0.2 0.3 0.5    Page 80 Note that the credit movement in the P4 period is driven by £11m of Benefits rent allowances and rent rebates not being posted on to system after the P4 close. 3. Aged Debt Analysis Note: Debt less than 60 days relates largely to Trading With Schools XDirectorate Divisional Aged Debt Analysis - Resources Finance Legal and Democratic Services HR, Workplace & Organisational Design invoices issued and not yet due. Commercialisation & Citizens Digital Transformation Policy, Strategy & Partnerships Older debt (120-365 days) relates to Capital - Business Change 1,200 Facilities Management invoices for Market trading which are for the full 1,000 year in advance and monthly payment plans are then agreed. 800 s 0 0 0 £

t b e D

g 600 n i d n n a s t u

TWS O 400

200

0 1to29_Days 30to59_Days 60to89_Days 90to119_Days 120to365_Days 1to2_Years 2to4.5_Years Over_4.5_Years Debt Age Range

4. Payment Statistics

Number % of late Average Invoice registered of Late Payment (>30 payments Invoices paid Division Amount Paid (£) days to late (>30 days after Retrospective order invoices days) registered without order pay invoice date) paid late 2 - Resources 21 Digital Transformation 5,319,630 1,303 75 570 44% 439 34% 77% 13 1% 451 35% 22 Legal and Democratic Services 1,488,612 846 37 239 28% 177 21% 74% 4 0% 347 41% 24 Finance 1,098,313 425 40 94 22% 75 18% 80% 163 38% 24 6% 25 HR, Workplace & Organisational Design 1,030,571 617 28 81 13% 58 9% 72% 0 0% 121 20% 28 Policy, Strategy & Partnerships 414,298 286 25 26 9% 9 3% 35% 0 0% 21 7% 2Y Capital - Business Change 4,205,370 300 33 68 23% 48 16% 71% 0 0% 20 7% 38 Commercialisation & Citizens 4,824,457 3,515 34 673 19% 508 14% 75% 20 1% 1,096 31% 2 -ResourcesTotal 18,381,250 7,292 41 1,751 24% 1,314 18% 75% 200 3% 2,080 29%

Page 81 c: Risks and Opportunities

5. Savings Delivery RAG Status

19/20 Resources Directorate Savings Target (£'000s): 4,464

Top 5 largest savings at risk in 19/20 (ordered by size of saving This month Last month at risk) Total value of Value at Proporti Total value Value at Proportion Value at Risk in savings risk on at of savings risk at risk ID Name of Proposal 19/20 (£'000s) (£'000s) risk (£'000s) (£'000s) (£’000)

No - savings are at risk 1,539 923 60% 3,750 1,577 42% NEW1-2 *17/18 Rollover*Facilities Management Savings £ 257

17/18 Rollover - Generate additional income from our NEW3-2 £ 250 Yes - savings are safe 2,882 0 0% 1,368 125 9% historic assets SAVING CLOSED - CONFIRMED AS 18/19 rollover - Mitigation for Workforce policy and 43 0 0% 0 0 n/a BE6-7 £ 223 'SECURED & DELIVERED' review - Resources Directorate Savings Target 18/19 rollover - CORPORATE SAVING -ONGOING BE7-4 £ 120 NO RAG PROVIDED 0 0 n/a 0 0 n/a MITIGATION TO BE FOUND Reviewing options for cash payments and/or cash related IN31 £ 50 Grand Total 4,464 923 21% 5,118 1,702 33% traded services

n/a - represents one off savings or -2,374 0 0% -2,374 0 0% mitigations in previous year Mitigated savings from previous years' that remain 'due' for Accelerated efficiencies (balancing line) -268 0 0% -268 0 0 delivery this year (£’000) WRITTEN OFF 0 0 n/a 0 0 n/a Amount due from previous year(s): £ 1,696

Grand Total 1,822 923 51% 2,476 1,702 69% Amount reported at risk: £ 623

6. Revenue Risks and Opportunities

Risk or Likelihood Net Risk Division Description Risk/(Opportunity) £ Opportunity (%age) /(Opportunity) £

Policy, Strategy and Income pressure in Bristol Design due to reduced programme of Risk 170,000 70% 119,000 Partnerships works. Policy, Strategy and Exploring business development options and vacancy savings Opportunity (170,000) 70% (119,000) Partnerships within PSP to mitigate Design pressure. Reduced summons income and automated service fee pressure Finance Risk 98,000 17% 16,400 (GovTec)- mitigated to date by £100k. Finance Opportunity Identification of mitigating actions in progress (98,000) 17% (16,400)

Finance Risk Additional Procurement staffing. 84,000 50% 42,000 Mitigation of Procurement pressure from within service Finance Opportunity area/division via vacancy savings and savings across division. To (84,000) 50% (42,000) be reviewed/identified for P5.

Finance Risk Risk & Insurance - prior year costs 114,000 100% 114,000 Mitigation of R&I pressure from within service area/division via Finance Opportunity vacancy savings and savings across division. To be (114,000) 100% (114,000) reviewed/identified for P5.

Finance Risk Annual LA errors risk. 475,000 50% 237,500

Finance Opportunity Benefits impairment provision adjustment for 19/20 (647,000) 37% (237,500)

Commercialisation Facilities Management - ongoing budget risk. Currently being Risk - - - and Citizens evaluated alongside measures to mitigate. Total Risk/(Opportunity) (0)

d: Capital

Approved Budget Revised Budget Expenditure to Date Forecast Outturn Outturn Variance £20.8m £20.8m £2.9m £20.0m (£0.9m) 14% of budget 96% of budget Page 82 Key Messages: The year to date underspend and full year forecast underspend relates to the slippage in the building maintenance programme e.g. for schools, due to the challenging timeline for procuring contractors within the short April to June window to start works during the schools holiday period.

Page 83 APPENDIX B 1. Capital Programme 1.1. The following table sets out the forecast Capital Outturn position for 2019/20 by Directorate, with further detail provided in Directorate Appendices. The table below illustrate the summary position by Directorate. Figure 1 - Capital Forecast Outturn position for 2019/20 by Directorate Previous Period Forecast Reported Revised Budget Budget Spent Variance Directorate Outturn Budget to date % £m £m £m £m 29.6 People 24.9 16% 23.7 (1.2) 20.8 Resources 20.8 14% 19.9 (0.9) 142.7 Growth and Regeneration 143.2 12% 112.6 (30.6) 193.1 Sub-total 189.0 12% 156.3 (32.7) 7.7 Corporate 10.2 25% 10.3 0.1 51.8 Housing Revenue Account 51.8 19% 51.2 (0.6) 252.6 Total 251.0 14% 217.8 (33.2)

1.2. Figure 2 below summarise the changes (net £1.6m reduction in 2019/20 from £252.6m to £251.0m) to the capital programme budget for cabinet approval. The changes mainly consist of the slippage of £7.5m projects to future years, £7.6m new funding applied in-year and the removal of budget that is now deemed to be revenue funded (£1.7m).

Figure 2 – P4 Budget amendments for cabinet approval

2019/20 Capital Budget P4 Budget Total Previously P4 New P4 P4 reprofile P4 Budget Change Ref Scheme Reported Funding Budget Revised addition / Virements to Budget addition Removed Budget (Reduction) Budget PE01 School Organisation/ Children’s Services 19,773 (6,685) 2,057 (4,628) 15,145 Capital Programme PE06B Adult Social Care – Better Lives at Home 4,898 127 127 5,025 Programme PE07 Extra care Housing 129 (127) (2) (129) 0

NH01 Libraries for the Future 173 (221) 450 229 402 NH02 Investment in parks and 2,119 279 (28) 251 2,370 green spaces PL04 Strategic Transport 3,440 37 37 3,477

PL05 Sustainable Transport 10,882 29 29 10,911 PL11A Cattle Market Road site 9,157 138 138 9,295 re-development PL11B Temple Meads Master 1,653 (1,653) (1,653) 0 Plan

Page 84 PL18 Energy services - Renewable energy 2,225 448 448 2,673 investment scheme PL25 Strategic Property - Community Capacity 450 (450) (450) 0 Building PL30 Housing Strategy and Commissioning 30,169 (600) 2,059 1,459 31,628 CP01 Corporate Initiatives and Capital Investments 2,540 2,540 2,540 Total 85,068 (7,506) 7,587 0 (1,683) (1,602) 83,466

1.3. Council is currently forecasting a £33.2m underspend (13%) on the revised capital programme budget (£251.0m). This is mainly in the Growth and Regeneration directorate and the material elements relate to the following: 1.2.1 Reforecast and re-profile of budgets in line with grant funding secured on the Housing Delivery Service - £13m 1.2.2 A review of the operation of Goram Housing Company based on more detailed plan of works - £6m 1.2.3 Delays to the completion date of the Colston Hall - £6m 1.4. Despite of the reported underspend in the programme, the current forecast assumes that the average monthly spend for the remainder of the year will be over twice as much as the current run- rate. Albeit it is not uncommon that the average expenditure is lower at this time of the year compared to the rest of the financial year, the forecast delivery continues to appear to be optimistic taking into consideration the previous two financial years’ run-rate and expenditure trend. Figure 2 - Capital Forecast and Run-Rate Comparison

Cumulative run rates Millions 300

250

Average Budget 200 AverageOutturn Last 2 FY

150 Forecast based on Average Forecast for Expenditure remaining months 100 Forecast based on current run rate 50

0 201901 201902 201903 201904 201905 201906 201907 201908 201909 201910 201911 201912

-50 Period

Page2 85 2. Summary of the capital programme funding and investments

2.1. During August the Council took advantage of historic low interest rates on long term borrowing and took out £20m borrowing through Public Works Loans Board. 2.2. In April Cabinet approved the Bristol Energy business plan which included an increased investment. In July £2.5m of funding was invested into Bristol Energy in line with the planned draw-down. 2.3. Bristol also invested £100k for shares in Avon Mutual as a founder member of the regional community bank.

Page3 86 APPENDIX B to

Current Year (FY2019) date Performanc Gross Capital Expenditure by Programme - Period 4 e to budget

Ref Scheme Budget Expenditure to Date Forecast Variance Forecast Expenditure £000s %

People PE01 School Organisation/ Children’s Services Capital 15,145 3,142 14,896 (249) 21% 98% Programme PE03 Schools Devolved Capital Programme 100 1,900 587 1,900 0 31% % PE04 Non Schools Capital Programme 100 279 54 279 0 19% % Page 87 Page PE05 Children & Families - Aids and Adaptations 100 170 2 170 0 1% % PE06 Children Social Care Services 100 1,095 4 1,095 0 0% % PE06B Adult Social Care – Better Lives at Home Programme 5,025 10 4,966 (59) 0% 99% PE08 Care Management/Care Services 100 228 107 228 0 47% % PE10 Sports Capital Investment 1,100 0 200 (900) 0% 18% Total 24,943 3,906 23,734 (1,208) 16% 95% People

Resources NH08 Omni Channel Contact Centre (ICT System development) 205 (47) 200 (5) -23% 97%

PL21 Building Practice Service - Essential H&S 4,377 316 3,614 (763) 7% 83% PL27 Vehicle Fleet Replacement Programme 100 4,200 1,297 4,200 0 31% % PL35 Harbourside operational infrastructure 100 450 0 450 0 0% % PL36 Investment in Markets infrastructure & buildings 100 250 0 250 0 0% % RE01 ICT Refresh Programme 100 2,736 66 2,736 0 2% % RE02 ICT Development - HR/Finance 1,623 417 1,078 (545) 26% 66% RE03 Future State Assessment (FSA) - ICT Development 106 6,214 852 6,568 355 14% % RE04 Bristol Workplace Programme 0 (84) 91 91 RE05 Mobile Working for Social Care (Adults & Children) 100 781 50 781 0 6% % Total 20,836 2,867 19,969 (867) 14% 96% Resources

Growth & Regeneration GR01 Strategic Property – Temple Meads Development 100 Page 88 Page 6,000 0 6,000 0 0% % GR02 Strategic Transport - Redcliffe Corridor 1,323 0 0 (1,323) 0% 0% GR03 Economy Development - ASEA 2 Flood Defences 100 2,588 0 2,588 0 0% % GR05 Strategic Property - Hawkfield Site 100 500 0 500 0 0% % GR06 Innovation & Sustainability - OPCR 2 100 3,018 251 3,018 0 8% % GR07 Areas for Growth & Regeneration - Pending Business Case 100 2,000 0 2,000 0 0% Development % NH01 Libraries for the Future 100 402 0 402 0 0% % NH02 Investment in parks and green spaces 2,370 288 1,906 (465) 12% 80% NH03 Cemetries & Crematoria - Pending Business Case 200 0 120 (80) 0% 60% Development NH04 Third Household Waste Recycling and Re-use Centre 1,054 0 566 (488) 0% 54% NH06 Bristol Operations Centre - Phase 1 100 630 88 630 0 14% % NH06A Bristol Operations Centre - Phase 2 2,277 135 2,277 0 6% 100 5 %

NH07 Private Housing 103 3,172 863 3,272 100 27% % PL01 Metrobus 100 (443) (144) (445) (2) 32% % PL02 Passenger Transport 2,285 307 1,635 (650) 13% 72% PL03 Residents Parking Schemes 100 103 38 103 0 37% % PL04 Strategic Transport 115 3,477 3,180 3,987 510 91% % PL05 Sustainable Transport 10,911 2,088 10,249 (662) 19% 94%

PL06 Portway Park & Ride Rail Platform 1,672 0 1,000 (672) 0% 60% PL08 Highways & Drainage Enhancements 100 660 (33) 660 0 -5% %

Page 89 Page PL09 Highways infrastructure - bridge investment 100 1,840 148 1,840 0 8% % PL09A Highways infrastructure - Chocolate Path 100 2,222 220 2,222 0 10% % PL10 Highways & Traffic Infrastructure - General 7,923 1,536 7,851 (72) 19% 99% PL10B Highways & Traffic - Street Lighting 100 346 0 346 0 0% % PL10C Transport Parking Services 100 500 0 500 0 0% % PL11A Cattle Market Road site re-development 100 9,295 527 9,295 0 6% % PL11B Temple Meads Master Plan 0 254 0 0 PL13 Filwood Green Business Park 100 158 0 158 0 0% % PL14 Bristol Legible City Scheme 100 268 39 268 0 15% % PL15 Environmental Improvements Programme 100 273 2 273 0 1% % PL16 Economy Development - ASEA 1 Flood Defences 100 41 1 41 0 3% %

6 PL17 Resilience Fund (£1m of the £10m Port Sale) 100 542 108 542 (0) 20% % PL18 Energy services - Renewable energy investment scheme 2,673 142 2,368 (305) 5% 89% PL18A Energy Services – Bristol Heat Networks expansion 100 5,895 69 5,895 0 1% % PL18B Energy Services - School Efficiencies 100 439 319 439 0 73% % PL18D Energy Services - EU Replicate Grant 130 109 461 597 504 43 % % PL19 Energy Services Phase 2 Investment & commercialisation 100 1,237 0 1,237 0 0% opportunities % PL20 Strategic Property 491 61 451 (40) 12% 92%

PL22 Strategic Property - Investment in existing waste facilities 1,128 8 940 (188) 1% 83%

PL23 Strategic Property - Temple St 549 152 396 (153) 28% 72%

Page 90 Page PL24 Colston Hall 17,625 1,546 11,292 (6,333) 9% 64% PL28 Bottleyard Studios 100 134 60 134 0 45% % PL30 Housing Strategy and Commissioning 31,628 3,368 18,107 (13,521) 11% 57%

PL30A Housing Programme delivered through Housing Company 12,225 534 6,225 (6,000) 4% 51% PL32 Western Harbour Design Development 100 480 0 480 0 0% % PL34 Strategic property - Community investment scheme 650 0 350 (300) 0% 54% Total Growth & 143,222 16,753 112,621 (30,600) 12% 79% Regenerat ion

Corporate Funding & Expenditure CP01 Corporate Initiatives and Capital Investments 102 102 2,540 2,600 2,600 60 % % CP03 Corporate Contingencies 100 7,673 0 7,673 0 0% %

7 Total Corporate 101 Funding & 10,213 2,600 10,273 60 25% % Expenditure

Total Capital Expenditure excl 199,213 26,126 166,597 (32,616) 13% 84% HRA

Housing Revenue Account HRA1 Planned Programme - Major Projects 10,631 2,235 10,416 (215) 21% 98% HRA2 New Build and Land Enabling 100 21,117 5,959 21,068 (49) 28% % HRA3 Building Maintenance and Improvements 20,084 1,716 19,715 (370) 9% 98% Total Housing

Page 91 Page 51,832 9,911 51,199 (633) 19% 99% Revenue Account

Total 251,046 36,037 217,796 (33,249) 14% 87%

8 Agenda Item 12

Resources Scrutiny Commission Resources Scrutiny Commission 18th September 2019

Report of: Denise Murray, Director of Finance

Title: Avon Mutual Regional Community Bank

The following report was originally presented at the 2nd July 2019 Cabinet meeting. It has been included in the Resources Scrutiny Commissions papers for information purposes.

Page 92 Decision Pathway – Report Template

PURPOSE: Key decision

MEETING: Cabinet

DATE: 02 July 2019

TITLE Avon Mutual Regional Community Bank

Ward(s) City Wide Author: Denise Murray Job title: Director of Finance Cabinet lead: Councillor Craig Cheney Executive Director lead: Mike Jackson Proposal origin: Other Decision maker: Cabinet Member Decision forum: Cabinet Purpose of Report: The report sets out the proposal being explored to create a regional local bank with an inclusive finance ethos that supports the local community and economy, and seeks approval for Bristol City Council (BCC) to make an initial investment that will support its establishment.

Evidence Base:

What is the proposition?

The Community Savings Bank Association, registered with the Financial Conduct Authority is seeking to develop 19 regional community banking models across the UK, with London and the South West already in the pipeline and Wales and some other regions following close behind. Avon Mutual was established to create a regional community bank for the West of England covering Bristol, South Gloucestershire, Bath, Gloucestershire, Wiltshire and North Somerset. Avon Mutual have approached potential social investors and regional anchor institutions (including BCC), that share the social and economic ethos of the mutual, to invest circa £20m of the share capital required. In April 2019, Avon Mutual opened their first offices at SETsquared Bristol and is part of the Business Acceleration mentoring programme.

Avon Mutual will have a social mission focused on the following:  the creation of a bank to serve the everyday financial needs of ordinary people, local community groups and small and medium sized companies;  help redress regional inequalities, make financial inclusion the norm, build and store community wealth;  significantly increase the proportion of bank lending going to the ‘real’ (non-financialised) economy and SME’s instead of the financial economy;  build regional economic resilience; and  bring about a renaissance of customer service, relationship banking and mutual trust.

In addition to the above, this investment could complement the local investment that has been made in support of the Bristol Pound (B£) and the Bristol Credit Union and via collaboration of these parties, help build the region’s evolving alternative finance ecosystem.

Local banks supporting local businesses have been successful in Germany with around 70% of banking carried out by some 1,700 local co-operative banks. With a change in the bank licensing rules, less onerous / capital intensive process and support from anchor organisations, not only in the set up but in utilisation, this model could be 1 Version May 2019 Page 93 sustainable in the UK. Avon mutual anticipates a timeframe from concept to trading from 2018 – 2021 and is seeking total investment of £20.5m in 3 rounds.

 Round 1 - 2018 - £500,000 - initial investment to build initial team and start licensing process - Investment in this round will result in two free shares for every share purchased which AM estimate equates to circa 20% IRR.  Round 2 - 2019 - £2.0m - Investment to finalise licensing, test systems, build bank team and first branches and HQ – Investment in this round will result in one free share for every share purchased which AM estimate equates to circa 15% IRR.  Round 3 – 2020/21 - Investment drawn down day after license gained to capitalize the bank. Operations go live with branches fitted out and systems integrated and trading commence £18m - Investment in this round will result in one share and circa 7.5% dividend.

The initial assessment of the financial return is that annual dividends of 7.5% could be achieved by year 5, with future increases related to share of profits. It is expected that a high and growing dividend yield, moderate share price growth is likely over the medium term and impact investors (such as local authorities) can choose to extract the additional return or recycle financial returns into further social impact in debt, poverty alleviation or financial capability and training. In further developing the proposition for the region, the Avon Mutual will need to complete detailed market research, operational planning and systems implementation. BCC would need to undertake our own due diligence and sensitivity analysis on the business plan assumptions prior to any further investment and to this effect £50,000 is being requested.

Why does Bristol need a regional mutual bank?

Access to financial services and financial inclusion are of fundamental importance to achieving an inclusive economy where no one is left behind. The impacts of exclusion are not just financial but also affect education, employment, health, housing and overall well-being.

The UK bank landscape and investment institutions currently do not provide a diverse and resilient financial system that has enough variety and choice to serve the needs of all our community. Groups of individuals and businesses are excluded from obtaining a basic level of service from financial services providers; bank branches closure in the region and Bristol specifically are significant and often in the poorest areas at a time, when there are still large sections of our community who rely on bank branches to carry out their banking needs, both business and personal. ATM charges are becoming the norm and the poverty premiums mean that those that are the most vulnerable pay more for financial services products.

According to Bristol University, individuals on low incomes suffer an average of £490 p.a. additional costs due to being prevented from accessing preferential deals due to their income levels and history. The impact of this ‘poverty premium’ can be severe - for 10% of these households the cost rises to £780 p.a. and for those in severe hardship this premium rises to as much as £2,250 p.a. These costs are attributed with lack of access to a full current account, a necessity to use high-cost credit, living in perpetual overdraft debt, households using high cost “rent-to-own” for essential household goods.

The mapping of deprivation within Bristol indicates 42 areas are in the most deprived 10% in England, including 6 in the most deprived 1%. It is estimated that over 72,000 (17%) Bristolians suffer income deprivation and in some areas of Bristol this is likely to be as high as 49%. With figures on this scale of the spectrum the poverty premium is likely to have a major impact in Bristol.

Micro, small and medium size enterprises (SMEs) are the engine of job creation but are increasingly overlooked by the large lenders. For many SMEs, access to cash can be a critical success factor tor the survival of the business. The issue of retail banking disappearing from local communities across the region is one that has been highlighted and currently attracting much media interest. 25 bank branches have closed in Bristol 2015 - 2019; South West region seeing 374 branches disappear for the same period. SME loans in the BS postcode area have fallen by 19% in 5 years

2 Version May 2019 Page 94 – almost double the national average of 11% and the Big four banks only allocated 1%-4% of assets to SME lending (Source: UK Finance Post Code Lending Data).

There is a strong view that these factors disproportionately hit communities and businesses in areas of deprivation or rurality and have a significant impact on the most vulnerable that need easy, inexpensive access to banking / cash facilities. It is important that consumers continue to have the freedom to pay for goods and services however they choose and access to cash must be maintained for those that need it. The rate at which free to-use ATMs have been closing indicate that these closures will have unintended consequences and be symptomatic of a wider issue. We recognise that as cash usage falls, it is important to consider how this infrastructure can be redesigned to better reflect cash’s declining popularity but this needs to be considered from both a social, economic and financial ethos.

What are the costs / benefit for the customer?

Avon Mutual are committed in achieving financial inclusion, the same service for all regardless of income and will charge a simple and transparent upfront membership fee of £5/month for personal accounts, £10/month for business accounts to all customers. In return for this fee, there are a range of benefits that current account providers will receive such as: - The provision of staffed branch services, which many SMEs rely on for cash banking facilities. - “Softer” analogue human factors and local knowledge. - A current account without requiring a minimum income or a credit check, which means that customers currently excluded and seen as a greater risk can bank, improve financial management and receive the wider benefits from direct debit discounts. - Interest will be paid on whole combined balance across accounts including current account balances. - No complex additional charges (for example SME’s paying in cash). - Access to cash via ATM’s will be free - bank branches are closing and independently operated machines usually charge around £1.50 to £2 per transaction. - The main credit product for Individuals and SME’s is an overdraft, which can only be provided directly by banks (and not by credit unions or post office accounts). - Access to residential mortgages as well as business and personal loans at reasonable rates.

The management fee is outweighed by these benefits and the significantly reduced ‘poverty premium’ for low income families.

What are the options available?

The Mutual has successfully raised £450,000 towards the first round investment from Stroud Council, two local foundations and local individual impact investors. Should BCC and other Council propositions in the pipeline be approved, this would take the Mutual’s total investment to date to £600,000 by end July, following which Round 1 will close. The Round 2 process will then commence to finalise the regulatory business plan and seek authorisation from the Bank of England and Financial Conduct Authority to become a bank and commence trading.

The following options are available to BCC: - Do nothing - No investment from BCC, risk that the target fund is not achieved - markets will determine the outcome and as such it is anticipated that without public intervention the current trend would continue to deteriorate. - Invest in Round 1 – to July 2019 – investment as a higher risk / reward. It reinforces to other public and private sector investors, BCC’s commitment and confidence in this proposition and provides the opportunity to work with the Board utilising our due diligence and area specific USP, to shape the long term proposition. - Invest in Round 2 - 2019 investment. The wider benefits are as above but with a high risk / but lower reward. The timing difference between Round 1 & 2 is minimal however the share conversion results in one free share for every share purchased as opposed to two in the earlier round - Invest in Round 3 – 2020 investment. This round delays the decision until 2020 where it would then be possible to invest this value or a larger amount at lower risk. 3 Version May 2019 Page 95 - Invest in all Rounds 1, 2 & 3 - as above

Conclusion

If BCC believe in the ethos behind the community bank and the benefits this could bring to the local economy, it is recommended that BCC invest up to £100,005 in Round 1 and a further £50,000 is earmarked for BCC to undertake [the necessary due diligence on the developing business / financial model, growth assumptions and the Bristol market for financial services, and help to shape the wider proposition for the region.

Members will recognise that in option 2 the investment may not necessarily be returned to the Council as there is a risk that there will be no financial return and the entire investment could be lost, if the plan to launch the mutual is unsuccessful, a banking license is not granted, or if the mutual turns out not to be profitable. Hence, at this stage, officers do not recommend investing in the mutual explicitly to derive a financial return as this is deemed too much of a financial risk.

It is envisaged that other authorities within the region who support inclusive financial and economic growth, would also consider investment to make this proposition a reality and potentially shorten the timetable to opening branches and commencing trading within the wider West of England region. At the time of writing the Council would be within the first group of authorities who have made a firm commitment to provide support to the mutual and we would seek to promote the wider benefits of financial inclusion to, other local authorities, Combined Authority and anchor organisations within the region.

Cabinet Member / Officer Recommendations: That Cabinet 1. Approve an investment of £100,005 (at risk) on the basis of the Council being a Founder Member to support the formation of Avon Mutual; a Regional Community Bank for inclusive growth, funded from 2018/19 Additional Business Rates s31 Grants. 2. Delegate authority to the Director of Finance in consultation with the Director Legal and Democratic Services and Deputy Mayor and Cabinet Member for Finance, Governance and Performance to conclude the subscription by the Council for 6,667 Founder Shares for a sum of £100,005 in Avon Mutual, and all matters and documentation required in connection with the Council’s application to be a Founder Member. 3. Approve up to £50,000 to be used by the Council to undertake further independent due diligence, which will include where applicable, the costs of consultancy support to inform the wider business model for this proposition and any further investment from the Council.

Corporate Strategy alignment:

The proposal supports the goal outlined in the Council’s Corporate Strategy and the One City Plan of “building a city of hope and aspiration, where everyone can share in its success” and in working towards this goal, the following Corporate Strategy priorities apply:

 Empowering and Caring - empowering communities and individuals, increase independence and support those who need it.  Fair and Inclusive - Improve economic and social equality, pursuing economic growth which includes everyone and making sure people have access to homes they can afford.

Our principles:  Build city resilience, improving ability to cope with environmental, economic or social ‘shocks and stresses’.  Use our assets wisely, generating a social and/or financial return.

City Benefits:

A community bank can assist in developing balanced communities which are inclusive. They can play a key role in 4 Version May 2019 Page 96 establishing a resilient city financing structure, with investment strategies that recognise the long-term challenges and vision for the region, the long-term resilience value shaped by investments, rather than just short-term financial returns. This proposition could assist the council deliver target outcomes around a prosperous and inclusive economy, as well as helping the city to be innovative, prosperous, resilient, and attractive to business.

Consultation Details:

 In conjunction with the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce), Avon Mutual have run a series of public events across the region to engage stakeholders, explain the plans and to hear what investors would want from the regions bank  They have also had hundreds of one-to-one meetings with people and organisations and spoken at over thirty events.  Avon Mutual Community Bank Round Table was hosted by BCC – with attendees from many of the regions with propositions in development.  Movement building is ongoing and will involve further stakeholder engagement as the proposition is shaped to reflect the region and key milestones are delivered.

Background Documents:

None

Revenue Cost £150,005 Source of Revenue Funding 2018/19 Additional Business Rates s31 Grants Capital Cost £ Source of Capital Funding One off cost ☒ Ongoing cost ☐ Saving Proposal ☐ Income generation proposal ☒

Required information to be completed by Financial/Legal/ICT/ HR partners: 1. Finance Advice:

This proposition seeks investment of £150,005 to support the next stage in the setting up (£100,005) of the Avon Mutual Regional community bank and further due diligence by BCC (£50,000) to inform the developing business model and support any decisions with regional partners for future investment.

The Mutual has successfully raised £450,000 towards the first round investment from Stroud Council, two local foundations and local individual impact investors. Should BCC and other Council propositions in the pipeline be approved, this would take the Mutual’s total investment to date to £600,000 by end July, following which Round 1 will close.

If approved, this investment will be made in 2019 and it is proposed that the Council uses funds from the unallocated additional Business Rates s31 Grants received from government in 2018/19, to invest in the Mutual. In return for the investment of £100,005, the Council will receive 6,667 Founder Shares, which will subsequently be converted into 20,001 ordinary shares. These shares are expected to receive a dividend of 7.5% if the new bank becomes profitable and the dividend return may rise over time if the bank is successful and the surplus is returned.

Growth expectations in the business model for the Region are as follows:

Customer: Year 1 Year 2 Year 3 Year 4 Year 5 Personal 4,745 17,745 37,375 61,750 78,261 % Increase 274% 111% 65% 27% Business 1,876 3,275 6,900 11,400 14,449 % Increase 75% 111% 65% 27% 5 Version May 2019 Page 97 As the Council will receive ordinary shares which we expect to have a right to receive a dividend attached to them if the society generates a surplus, this initiative could be considered as an investment. However, any dividend would be subject to Avon Mutual receiving the relevant approvals and future funding to enable it to operate and, once it commences operation, being profitable. Given the risks that this may not be achieved this should not be viewed as an investment made for purely financial return but one which supports the local economy and at least in the short term akin to an economic grant. The current business model proposes a small monthly charge (£5/£10: personal / business) for each customer and further consideration will need to be given as to how this can be mitigated for vulnerable customers.

By making this “investment”, the Council will be forgoing potential return on the business rate pilot gain monies. The current investment return achieved by the Council is c.0.9% per annum. This equates to forgoing £900 per annum, if interest rates and returns were to remain the same.

While community banks would tap into localism, they would still have a challenge in attracting customers as bank switching is not a common occurrence and the competition could perceive a threat and respond accordingly. Some depositors would act out of philanthropic motives, however community banks would still have to offer an attractive commercial proposition to lenders and borrowers if they are to be viable and remain sustainable in the long term. Finance Business Partner: Chris Holme - Interim Head of Corporate Finance – 12/06/2019 2. Legal Advice:

There are two primary powers which would enable the Council to invest in Avon Mutual – Section 12 Local Government Act 2003 and section 1 Localism Act 2011. Under section 12 (a) Local Government Act 2003 a local authority may invest for any purpose relevant to its functions. There is no limit on the nature of the investment, provided it is relevant to the authority’s functions. One function of the authority is to deliver the One City Plan, and investment in Avon Mutual is consistent with that function. Section 12 (b) Local Government Act 2003 allows a local authority to invest for the purposes of the prudent management of its financial affairs. Investment under (b) is aimed at general prudential management of finances, which would mean any investment would need to comply with the authority’s investment strategy etc. Section 1 Localism Act 2011 gives a general power of competence. As the investment in Avon Mutual may be characterized as an activity for a commercial purpose, then the local authority can undertake the activity through a permitted structure as set out in s4 Localism Act 2011. The proposed Avon Mutual structure as Avon Mutual is a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, which is permitted under section 4.

Avon Mutual is a co-operative society registered with the Financial Conduct Authority, but yet to commence trading. It requires further regulatory consents before it can commence trading, and if these are not forthcoming the Council will lose its investment.

As a limited liability entity, if Avon Mutual is wound up, the Council will have no liability beyond the value of its initial investment. The shares are non-withdrawable – this means that the Council cannot withdraw its share capital from the Mutual; it can only cease to be a member if the directors of Avon Mutual agree to that being the case.

A shareholder is not automatically a member of the Mutual – an application has to be made. It is envisaged that the application to become a member will take place at the same time as the application to subscribe for shares. If the application to become a member is not accepted, Avon Mutual is under no obligation to repay the subscription monies for the shares.

Shares being issued are ordinary shares (convert from Founder Member shares). There is no guarantee that any dividend will be paid on those shares, and so there is no guarantee that the Council will receive any return on its investment. The copy of the rules which relating to Avon Mutual which is filed on the Mutual Societies register suggests that the board can determine the rights attaching to the shares by resolution prior to the first issue of shares of that class. We have not seen a copy of any such resolution or other confirmation of the rights (such as a right to receive a dividend if a surplus is generated) attaching to the shares. As such, before entering into any

6 Version May 2019 Page 98 arrangements with Avon Mutual, the Council should clarify the terms attaching to the shares and Membership, including confirmation that no further membership fees will be payable.

The Council is being offered the opportunity to invest on the same terms as other investors (who include private sector individuals). The share price is fixed in the rules of Avon Mutual. As such any risk of state aid to Avon Mutual would be considered low, on the basis of the normal market investor principle.

There are no regulated procurement implications in connection with the subscription for shares, as this is a financial investment and the amounts are below the thresholds set out in the public procurement regulations in any event.

Legal Team Leader: Eric Andrews, Team Leader, Legal Services - 21/06/2019 3. Implications on IT: As a funding only initiative, there are no identifiable IT implications in this proposal. IT Team Leader: Ian Gale - Service Manager, Service Delivery and Integration – 11/06/2019 4. HR Advice: No HR implications evident because Avon Mutual is a separately constituted organisation.” James Brereton (People & Culture Manager), 12th June 2019 HR Partner: James Brereton - People & Culture Manager, 12/06/2019 EDM Sign-off Mike Jackson 29/05/2019 Cabinet Member sign-off Cllr Cheney 21/06/2019 For Key Decisions - Mayor’s Mayor’s Office 24/06/2019 Office sign-off

YES Appendix A – Further essential background / detail on the proposal

Appendix A - Avon Mutual Regional banking for inclusive growth NO Appendix B – Details of consultation carried out - internal and external NO Appendix C – Summary of any engagement with scrutiny NO Appendix D – Risk assessment YES Appendix E – Equalities screening / impact assessment of proposal NO Appendix F – Eco-impact screening/ impact assessment of proposal NO Appendix G – Financial Advice NO Appendix H – Legal Advice NO Appendix I – Exempt Information NO Appendix J – HR advice NO Appendix K – ICT

7 Version May 2019 Page 99 AVON MUTUAL

Regional banking for inclusive growth Page 100 Page

May 2019 update for Bristol City Council Contents

1. Why do we need a regional mutual bank?

Page 101 Page 2. Introducing Avon Mutual: products and services

3. Impact and investment case: the benefits for Bristol

2 Page 102 Page

1. Why do we need a regional mutual bank?

“Central government should explore and encourage the establishment of regional banks… including community banking models such as the Community Savings Bank Association.” RSA Inclusive Growth Commission 3 Current banking is failing the West of England

HOW EXISTING BANKS ARE FAILING IMPACT Banks put profits and bonuses first Banks are incentivised to prioritise short-term investments over social,

environmental, and local needs

Banks are remote and unaccountable Banks do not work in the interests of society or communities, their decision making is opaque, and there is little recourse to challenge

them TRUST

Page 103 Page People no longer trust banks People are increasingly wary of banks, undermining confidence in the financial system and its institutions

Bank lending is rigid and inflexible, based on algorithmic Small, micro, community and social businesses are excluded from assessment – the “computer says no” lending, reducing growth and opportunity Branches are disappearing Branch closures worsen financial exclusion for communities and the

vulnerable, and hasten local economic demise SERVICE Small businesses are poorly served Cash services are increasingly restricted, business accounts provide poor value, and lending is too expensive and risky Too many people are excluded from banking Banks financially penalise many on low incomes, and are bad at

providing for people with complex needs – many prefer to avoid

Lending and deposits are heavily skewed to London and do Mass inequality between London and other regions. Local deposits not fund the local economy fund global speculation and London property bubble

GROWTH During the recession, large commercial banks withdrew Local economies suffer from mainstream bank mistakes, lack INCLUSIVE INCLUSIVE credit from local economies resilience, and are susceptible to financial and economic shocks 4 Restoring trust in banking

Since the financial crisis and a series of scandals from PPI to interest rate swap mis-selling, trust in banks has fallen dramatically. This matters because if business and consumers lack faith in banks, they will not seek access to finance they need to make the most of economic opportunities. Avon Mutual is seeking to restore trust.

Page 104 Page • Work for, owned by, and accountable to our customers • One member, one vote. Every customer is a member • We will not engage in financial trading or speculation • No bonuses or sales incentives paid to staff • Living wage employer

• Maximum 10x staff pay ratio top to bottom Do you trust your bank? TRUST

• Board directly accountable to customers Keeping my money safe 48% • Simple, honest and transparent charging structure Protecting my personal and financial information 43% • No pressure to cross-sell financial products Providing me with truly unbiased advice suited to my 25% needs Telling me if there is a better product for my needs/ 21% situation even it means less money for them 5 Source: EY Global bank survey 2016: Without it you’re just another bank Customer service comes first

Branch access is still important for customers Branch closures in Bristol (2015-17) • UK losing 60 branches and 300 cash machines a month – often in the poorest areas • Vulnerable customers including the elderly, disabled, and those of low financial means are particularly affected • But consumer research shows that people want branches and still use them

Page 105 Page • Many small businesses are reliant on branch facilities for banking takings and have to travel further for banking facilities, harming their business • Branch closures have also been associated with declining local economies

Customers value relationships and managers with power to take decisions • Human judgement has been replaced with algorithms and chatbots • This means that any person that does not fit the system is rejected, leaving many potential customers unserved or underserved • Peoples top reasons for choosing banks are based on being treated as an individual • Avon Mutual uses modern technology and low-cost branch solution to open branches and enable provision where other banks are retreating 6

The Poverty Premium

• According to Bristol University those on low incomes suffer an average £490 p.a. additional costs due to their low income preventing access to better deals • The impact of this ‘poverty premium’ can be severe - for 10% of these households the cost rises to £780 p.a. and for others this premium rises to as much as £2250 p.a. • In some areas of Bristol this is likely to be a major concern, with for example 49% of people living in ‘Fulford Road North’ in Hartcliffe ward suffering from income deprivation

Page 106 Page and the poverty premium. Over 79,000 Bristolians suffer income deprivation • Greater London Mutual has estimated that 63% of this cost is associated with lack of access to a full current account. Current estimates suggest there are around 1.3m people without a current account in the UK • 2.5m people are using high-cost credit, and 2.1m living in perpetual overdraft debt • 400,000+ households are using high cost “rent-to-own” for essential household goods • There are 16m people in the UK with savings of under £100 • Bristol University estimate that the elimination of the poverty premium could potentially release an extra £4,000m per year into the local communities and economies that need it the most.

“The impacts of exclusion are not just financial but also affect education, employment, health, housing, and overall well-being.”

Sources: PFRC, CSFI and JRF, 2016 Financial Inclusion Commission 7 Reducing the poverty premium

● Bristol University’s Personal Finance Research Centre’s report Making the Poverty Premium History has recently called for new forms of banking relevant to the socially excluded - this speaks directly to Avon Mutual’s business model and focus on appropriate credit assessment and closeness to customers and community: ○ “While innovation and Fintech are attractive for some, they will not be Page 107 Page appropriate for all low-income customers, especially the most excluded and vulnerable. To feel properly valued and supported, customers may want to interact in other ways, including face-to-face. Investing in some more personal assessment (of credit risk, for example), and relying less on automation as a default, will deliver a business model that better serves low-income customers.”

● The study identified a current market gap emphasising how the expansion of socially inclusive stakeholder banking is key to reducing the poverty premium: ○ “the FCA recently estimated that over four million people use some form of unsecured high-cost credit, at a value of £8.3bn. In contrast, the Community Development Finance Institution (CDFI) market lent a total of £20 million in personal loans, and the reach of credit unions appears to be similarly constrained.”

8 Banking for inclusive growth - Households

Based on pro-rata estimates, the number of people and households in People without bank accounts Bristol with inadequate financial provision or showing signs of financial distress are shown below. Financial inclusion and literacy are key parts of the mission of Avon Mutual.

INDICATOR BRISTOL est.

Page 108 Page Individuals without bank account 12,000 Households without bank account 7,000 ‘non-users’ of the internet 60,000 Entirely dependent on cash 19,000 Consumers with 1 or more indicators of potential vulnerability 183,000 Can’t pay bills/meet credit commitments in 3 out of last 6 months 29,000 Not able to find £200 at short notice 40,000 3 day emergency food packages from Food Banks 8,000 Adults with little or no confidence in money management 88,000 Used unauthorised overdraft facility in last 12 months 22,000 Borrowing from friends and family in last 12 months 25,000

Sources: Pro-rata on adult population of Bristol City Council area - 365,000 from UK population estimates mid- 2017, HMT report on cash 2018, CHASM Financial Inclusion Report 2016 & 2017, FCA Financial Lives Survey 2017 Source: CHASM, Financial Inclusion Monitoring Report 2017 9 Banking for inclusive growth – SMEs & the real economy

Smaller SMEs are increasingly neglected by high street banks Distribution of bank assets Total SME Loans, BS postcode • SME loans in the BS postcode area have fallen by 19% in 5 years – almost double the national average of 11% • Big four banks only allocated 1%-4% of assets to SME lending: Avon Mutual plans to allocate 25% to local SMEs

• 109 Page According to the ONS Bristol SME registrations rose 6% 2016-17 and those registered (which are only about 50% of the total) employ 101,000 people and represent £11.7bn business for the economy. • Small businesses in Bristol have bank deposits of £750m but only £308m of loans – a net outflow of £441m • Medium sized businesses have bank deposits of £662m but only £458m of loans – a net outflow of £204m

In the UK since the financial crisis, large commercial banks Source: Bank Annual Reports vs Avon Source: UK Finance Post Code Lending Data. Total of 7 Mutual Financial Model largest banks: Barclays, CYBG, Lloyds, HSBC, Nationwide, have withdrawn credit from productive lending, local economies RBS/Natwest and Santander and SMEs. In countries like Germany stakeholder banks have NOTE: BS postcode figures are shown as data is not stepped in to fill this gap available for local authority areas

10 Banking for inclusive growth – regional regeneration

● The UK’s regional GVA (Gross Value Added) is highly skewed towards London compared to other counties. ● Empirical studies in Italy and Germany found that cooperative banks and savings banks help reduce ‘capital drain’ to urban Page 110 Page centres and capital cities thus regional inequality, most probably because of their strong SME lending. ● Preventing such a capital drain can help create jobs and encourage people to stay in their local area, rather than having to migrate to economic centres to look for work.

The light purple shaded bar shows the range of the highest to lowest region for each country. The dark green bar shows the national average. The light green circle shows the capital city region. The dark purple circles show the other regions.

11 International evidence and best practice

Three characteristics of regional Avon Mutual is part of the Community Savings Bank Association which has created stakeholder banks across the world: a regional banking model for the UK that is based on substantial and robust theoretical and empirical evidence about successful banking models in other countries. Mission-led The UK is highly unusual in having a domestic banking sector that is dominated by Dual social and Page 111 Page financial mission large shareholder owned and profit driven banks. In many other countries, from USA, Canada, Europe to South East Asia and Japan, regional stakeholder banks hold a large or majority share of the banking sector and have significant social and economic impacts: Composition of banking system Regional • Commitment to financial inclusion Devoted to serving a defined area • Higher proportion of SME lending • Credit allocation to real (non financialised) economy • Reducing regional inequalities Networks Collaboration enables • Boosting resilience of local economies in recessions efficiency and scale without removing • When commercial banks shrink such support local autonomy

12 Page 112 Page

2. Introducing Avon Mutual: Products and Services

“Throughout my time we have committed to getting inclusive growth, that means getting right to the very basis of the nature of the economic development and growth that we experience, so that by definition and by process it is inclusive.” Marvin Reese, Mayor of Bristol 13 Introducing Avon Mutual

A mission-led community-wealth building anchor institution promoting sustainable and equitable prosperity for the West of England • First customer-owned regionally focused full service bank • Serving people of ordinary means, community groups, SMEs (SEMs) Page 113 Page and social enterprises • Committed to a renaissance of branches and relationship banking • Scale and efficiency – part of the CSBA network • Financial strength: Profits £20m pa / loan book £430m by year 9 • Using the very latest technology, and free of outdated legacy infrastructure of mainstream banks

14 Completing the community finance puzzle

Community Banks the world over compliment other key players such as Credit Unions. Below are the “Lock and key” synergies between credit unions and community banks (analysis carried out by RSA and the Finance Innovation Lab):

. Current accounts: Avon Mutual will have access to the payments system, unlike CU, but can provide current accounts to CU customers thus helping them mitigate the ‘poverty premium’. . Business banking: although credit unions can theoretically provide business banking, in practice they lack the resources and skills to do so. Avon Mutual will open on day 1 with experienced business bankers and

Page 114 Page the essential core services required by SMEs: current account, branches, and overdraft facilities. Core and unique features Complex needs . Breadth: crucially, the ability of Avon Mutual to offer residential mortgages as well as business and personal loans allows it to rapidly achieve scale and financial viability. Large loans Tailored relationship- . Scale: Avon Mutual is projected to have a large deposits base than BCU. Currently BCU has in the region of based sevices £8m. Current account Smaller loans . Savers: we consider it highly unlikely that any BCU depositors will switch deposits to Avon Mutual. Our main target market is customers of high street banks. SME loans Financial capability . Loans: there will be individuals with minimal credit records and complex needs that will be unsuitable for sessions lending by a regulated bank and for which a credit union is better suited. . Co-operation: in other countries stakeholder banks and CUs work closely together, and here many CUs are Core & Unique CU Complementary Core & Unique AM welcoming the advent of our movement. We are in discussions with a number of CUs, including BCU, and features features features with the Association of British CUs, to form collaborations to cross-refer and work together to serve customers.

15 Avon Mutual's Board

DENA BRUMPTON GRAHAM HUGHES Recently retired after a long career in Citigroup and Is a qualified Solicitor and one of the founding directors Barclays where she was most recently CEO of Barclays of Church House Trust plc, a bank which was Savings, Investment and Wealth management. She has subsequently sold to Virgin Money plc. He also chairs been recognised in Top 25 ‘Women of Inspiration and the Remuneration Committee for a local Hospital Enterprise’ and City Power Woman. Dena is also a past Foundation Trust and is a volunteer adviser at Citizens member of Cancer Research UK Women of Influence Advice. Board. Page 115 Page TRACY MORSHEAD Is Chair of Mortgage Brain and of the National Friendly JULES PECK Society and a NED with the Newbury Building Society. Is Founding Director of Avon Mutual, Founder of the Real Tracy's career has included roles as MD of Principality Economy Lab, a Board member of the New Economics Building Society and at Nationwide. Prior to working in Foundation, a Research Fellow on the future of the financial services Tracy had a career in marketing with economy at the Democracy Collaborative's Next System Project, an Advisor to The B Team, a Fellow of the RSA ITV and led marketing at board level for Grand Met. and a Certified Bank Director.

RICHARD WARRINGTON Has focused on the areas of Risk and Compliance as well as Governance and Culture throughout most of his 40-year career in financial services. He has worked in banks (NatWest, Lloyds, NAB, Virgin and Egg), building societies (Woolwich and Nationwide), insurers (RSA) and also, most recently, in risk management consultancy. He has held senior executive and Board positions, as well as significant 16 influence/ controlled functions. Avon Mutual's growing team

Paul Hornsey – Operations Director – has Clive Bowles – CTO - has over 26 years financial 20 years of experience in operations and services industry experience, having worked with Barclays regulatory compliance in Financial Services in Bank, the Bank of Nova Scotia, West Merchant Bank and the U.K. & Abroad for companies including Deloitte Touche before establishing his own IT Nationwide, Morgan Stanley, UBS, Credit consultancy and software company in 1996. Misys Plc Suisse, JP Morgan and started his career acquired his company in 2004 and since leaving Misys in with Andersen Consulting. 2007, Clive has continued to provide IT consulting services to various financial institutions in the UK and Page 116 Page overseas on data migration, data warehousing, reporting, system selection and system integration. Clive was a non executive director of Charity Bank and of CAF Bank.

Fionn Travers-Smith – Project Officer - also Gareth Griffiths – Customer and proposition Director - leads the Positive Money 2º Lending Network City has over 15 years experience in retail banking and wealth Finance Labs initiative, is Social Impact Officer and management working on customer proposition, marketing, a Founding Member of Avon Mutual’s sister bank branch design and management and call Centre Greater London Mutual. Previously, Fionn management with HSBC, Bradford & Bingley and RAC. managed the Move Your Money campaign, and has published work on the future of finance with the RSA, New Economics Foundation, and others.

17 Our current offices

In April 2019 we opened our first offices at Setqsaured Bristol where we are part of Page 117 Page the Business Acceleration mentoring programme.

18 Avon Mutual’s Advisory Council

• We are also building an Advisory Council of advisors who are supporting us with a variety of pro bono support on issues such as PR, communications, branding, ethical policy, investment, legal, community engagement, fintech and business planning. Page 118 Page

19 Avon Mutual’s growing band of supporters……..

Craig Cheney, Bristol Deputy Mayor, Steve West, Vice Chancellor of the University of West of England and Chair of regional LEP; Canon Dr John Savage CBE, Chair West of England Initiative and Bristol Royal Infirmary; Darren Jones MP; Alex Chalk MP; Wera Hobhouse MP; Hugh Brady, Vice Chancellor of Bristol University; James Durie, CEO of Business West, The Initiative and Chambers of Commerce; David Owen, CEO of Gloucestershire LEP; Ken Loach, social campaigner and film director; Alan Bailey, Chairman Low Carbon SW and serial entrepreneur; Marcelle Spellor OBE, Founder Localgiving and trustee of New Philanthropy Capital; Jaya Chakrabarti, Board member of SWIG Finance; Jeremy Sell, Bath based growth, institutional investor and IPO expert; Alastair Sawday, publisher and environmentalist; James Moore, Founder, CSBA; Peter Capener, Founder Bristol and Bath Community Energy and Trustee at Power To Change; Alan Bec RSA SW Fellowship Councillor; John Pontin OBE; Dave White Founder and CEO White Bruce; Ian Townsend, CEO of Bristol Green Capital Partnership; Mohammed 119 Page Sadiq, Chair Bristol Green Capital Partnership; Tony Greenham, Director of Economy, Enterprise and Manufacturing, RSA; Peter Lipman, Chair Transition Network; Rob Hopkins, Founder of the Transition Towns movement; Sir Jonathan Porritt, past Chair of SW RDA; Dave Hunter, Trustee Bristol Pound; Simon Cooper, Society of Merchant Venturers, chair of the Schumacher Society, director of Bristol Chamber of Commerce & Initiative; Peter Holbrook, CEO Social Enterprise UK; Andrew Garrad, Society of Merchant Venturers and Cabot Institute; Ken Simpson, Regional Chair of the Federation of Small Businesses; Seth Tabatznik, Founder of Berti Investments; Edward Hoare, banker and philanthropist; Colin Skellett, CEO Wessex Water; Professor Olinga Taeed, Founder Blockchain Alliance for Good; Barbara Mellish, President Blockchain Alliance for Good; Charlie Thomas, Fund Manager of Jupiter Ecology Fund and Jupiter Responsible Income Fund; Chris Coles, Bath social entrepreneur and finance sector specialist; Alastair Singleton, Founder Hanover Fox headhunters; Peter Macfadeyn, ex- Mayor of Frome; Molly Scott-Cato MEP; Merlin Hyman, CEO Regen SW; Peter Madden OBE; Jamie Pike, Founder of Bristol Coexist and Canteen; Oliver Mochizuki, Founder and CEO of Fundsurfer; Ed Mayo, Secretary General of Cooperatives UK; Gavin Eddy, Social/Angel Investor; Tom Sain, Investment Manager; Tom Carnac, Mission 2020; James Perry and Charmian Love, Co-Chairs of B Corps UK; Paul Cobham, Social/Angel Investor; Stephen Dawson, Venture Capital pioneer and Angel Investor; Luke Lang, Co-Founder Crowdcube; Chris Shaw, Chairman of Savings Champion; Harry Partington, Chair Bristol Credit Union; David Freed, Founder Deeley Freed Estates and The Park Community Centre; Trevor Osbourne, Chair The Osbourne Group, Governor and Trustee of Bath Spa University, member of the Bath Initiative and Greater Bath Ltd; Henry Meakin, Founder, GWR.

20 Some notable supporters Page 120 Page

21 Avon Mutual in 2029

Our prudent financial plan is based on modest market share 92 FTE Staff 7 Main Branches targets and slow but steady growth in deposits and loans. Avon Mutual Even these conservative projections show that in 10 years Avon Mutual will be a financial powerhouse for the region.

Financial and operating statistics £m Market Page 121 Page share

Residential mortgages £147m 0.3% SME/SE loans £144m 3.5% Personal loans £129m 8.2% Customer deposits £482m 0.7% Personal members 69,300 3.1% Corporate members 17,600 8.5% Annual profits £20m Equity Tier 1 ratio >15% Cost/income ratio 50% Member participation 21 Satellite Branches Note: final branch locations will depend on rigorous market assessment 22 Full range of services competing with high street banks

Staffed branches Satellite branches Digital channels Current accounts

AVON MUTUAL Avon Mutual Page 122 Page

Avon Mutual

7 main branches act as sub- 21 high-tech satellites - Multi-channel access Fixed, transparent and simple membership fee: Personal: £5 / month organisation: £10 / month. regional hubs. Branch access all the same to products and

director has autonomy over services as in a main services by web Budgeting tools including analysis of expenditure and lending. Anchor for local branch 24/7. Video link to online banking and visualisations and ‘Jam jar’ functionality to improve control over relationships and knowledge. talk to customer assistants. banking app for finances. Low cost and can be co- mobile, tablet. Interest on whole combined balance across accounts including located with community current account facilities. 23 Why a monthly charge? The myth of ‘free banking’

• The UK market for current accounts is unusual in its charging structure, with apparently free current accounts (Free-if-in-credit – FIIC) – most other “It is a myth because nothing in life is free...this countries charge for banking. FIIC account providers over-sell other complex unclear picture may have encouraged the mis- selling now causing so much trouble.” and untransparent products to pay for the cost of such accounts. Andrew Bailey, Chief Executive FCA on ‘free banking’ • We charge a simple, transparent and honest fee of £5/month for personal, 29th June 2017 £10/month for organisations.

Page 123 Page • Unlike most banks we pay interest on current account balances - a recent FCA report calculated that 90% of customers with FIIC accounts were effectively paying charges if foregone interest is included. As shown in the comparison with Lloyds and Natwest FIIC accounts, once the balance exceeds £1000 our Bank CSBA Lloyds Natwest account is better value. It is much better value for any customers who need an Classic Select overdraft. The £5/month costs is outweighed by these benefits and the Monthly membership fee (5.00) - - significantly reduced ‘poverty premium’ for poorer customers. Interest on £1,000 in 1.22 - - • Because we can offer a current account without requiring a minimum income current account or a credit check we can bank currently excluded customers who are not Cost of £500 overdraft for (1.94) (10.65) (9.74) allowed to have FIIC accounts by the high street banks and who suffer a high 15 days poverty premium as a result.

We believe financial inclusion means equality of respect: the same service for all • 44% of Free-If-In-Credit accounts attract overdraft charges • 80% of consumers do not know what their overdraft charges are regardless of income, wealth or background. • £2.9 billion paid in overdraft fees in 2014 • £4.3 billion interest foregone in 2014 24 Cutting edge FinTech World class partners

• Compared to mainstream banks with huge IT legacy Core banking issues, our FinTech ecosystem delivers a “plug & play” system multi-channel, modular, customisable banking framework at significantly lower cost and lower risk. Faster payments • Anchored by a Tata’s TCS modular, cloud core-bank system, innovative BankPod satellite branches, Cards

Page 124 Page robotised safe deposit boxes and interfaced to multiple management networks designed with nodes both traditional FinTech License & “hard” digital data and crucially often overlooked audit “softer” analogue human factors and local knowledge. Security & • Remote human interaction is taken to a new level with safe deposit highly innovative new in-house developments in direct boxes eye-to-eye video conferencing which is key to our remote banking and for which we will be applying for a Teller system UK patent and the use of augmented reality to reduce the cost of remote branches. Social impact

Advocacy and support 25 Business current accounts and overdrafts are key

As noted earlier, small businesses in Bristol deposit £441m more than they borrow, and medium businesses deposit £204m more than they borrow. They do not receive interest on these deposits. A key advantage of Avon Mutual is that it provides the products most needed by SMEs, business current accounts, cards, overdrafts and branches.

Page 125 Page Our £10/month charge compares favourably with other banks because - Unlike other banks, we pay interest on current account balances - There are no complex additional charges, for example for paying in cash - The monthly charge funds the provision of branch services, which many SMEs rely on for cash banking facilities

Although the ability to offer loans is important, and our relationship banking and Note: some small businesses use personal current accounts local branch model will give us a competitive advantage in this respect, it is rather than business current accounts important to note that the main credit product for SMEs is an overdraft, which can only be provided directly by banks (and not by credit unions or loan funds).

26 Stronger together – the CSBA model

Until recently it was extremely difficult to start a new mutual bank because of hostile regulators, massive IT systems costs, inability to access payment systems controlled by the large banks, and co-ops were not permitted to have a banking licence. However, since the financial crisis there has been a political commitment to allowing new challenger banks, increasing availability of high spec off the shelf IT solutions, breaking up of the payments monopoly and a new law in 2014 that allow co-ops to become Page 126 Page banks. The formation of the Community Savings Bank Association (CSBA), of which AM is a member, is the final development needed to start a new movement of 18 regional mutual banks. Their highly experienced Board has created a comprehensive template to start a bank, including financial modelling and agreements with key suppliers – the ‘Bank in a Box’:

27 Page 127 Page

Quote from3. ImpactReese and investment case: the benefits for Bristol

“In terms of the delivery of a current account, we would rather partner with a local community bank in some way to ensure that our members had more access to a full suite of products.” Credit Union CEO 28 Alignment with BCC strategies, values, and aims

• AM fully aligns with BCC’s One City Plan, the 2018-23 Corporate Strategy, the Resilience Strategy and the 2018-19 Business Plan. • Predominantly Avon Mutual will further outcomes in BCC’s “Fair and Inclusive” theme, although we can also contribute to the “Empowering and Caring” and ”Corporate Services and Organisational Support” themes as well.

Page 128 Page • In particular, AM is well positioned to advance the strategic priorities of ‘people centred sustainable prosperity’, ‘inclusive business types and models that create the right conditions for people-driven productivity’, and ‘delivering good growth that enables social mobility’ in the Inclusive and Sustainable Economic Growth Strategy cabinet agreement. • AM is also well positioned to “help develop balanced communities which are inclusive and avoid negative impacts from gentrification” through our regional investment and local branch model. • AM can play a key role in the BCC aims to disrupt the market and establish “a resilient city financing structure” which would “seek to blend public and private money” with “investment that is able to recognise long-term resilience value, rather than just short-term financial returns”. • AM will help the council deliver target outcomes around a prosperous and inclusive economy, as well as helping the city be innovative, prosperous, resilient, and attractive to business. Our values and ways of working are also highly aligned. 29

Building a vibrant regional financial ecosystem

• The UK bank landscape is missing our kinds of banks - other countries have a broad range of institutions that in combination provide a diverse, resilient and vibrant regional financial system that has enough variety and choice to serve all needs. This spans from local/neighbourhood credit institutions (German co-operative banks, US Community Development Credit Unions), through to regional banks and investment institutions (Swiss Cantonal banks and German Landesbanken). • Bristol and the wider region which supports it with customers, workers and supplies deserves its own bank - as the BCC

Page 129 Page Resilience Strategy points out, “Bristol is also increasingly recognised as a leader in next economy ‘pattern disruptions”, it is unique in perhaps being the UK powerhouse of an ecosystem of community-wealth building enterprises such as:

Bristol and Bath Regional Capital || Bath and West Community Energy || Bristol Energy Mongoose Community Energy || Sustrans || Soil Association || Centre for Sustainable Energy || Triodos Bank || Bristol Pound || Engine Shed || Watershed || Bristol Community Energy || Happy City || numerous Transition Town initiatives || Together Group Komedia || Bristol Green Capital Partnership || Festival of Ideas || Resonance || St Johns and Quartet Foundations || Society of Merchant Venturers || The Matthew Tree Project || Bristol Bike Project || Knowle West Media Centre || Malcolm X Centre || Bristol Credit Union || Wiltshire Savings and Loans || Bristol Community Land Trust || Ardagh Community Land Trust || Ecomotive || Swindon’s Mechanics Institution Trust

• Avon Mutual plans to be part of this ‘pattern-disruption’ by collaborating with these and many other players to help put the region on the map as a best-in-class regional next-economy inclusive-growth incubator and exemplar. In particular we will complement and help build the region’s evolving alternative finance ecosystem. 30 Community banks and credit unions

• CUs play a vital role in the alternative finance ecosystem and our banks plan to work closely with CUs. Work carried out by the RSA, Finance Innovation Lab and NEF has identified a number of differences “Lock and key” synergies and complementarities between community banks and credit unions which, rather than overlap, offer between credit unions and symbiosis and partnership potential: community banks • Current accounts: Avon Mutual will have access to the payments system, unlike BCU, but can provide (RSA/Finance Innovation Lab/GLM) current accounts to BCU customers thus helping them mitigate the ‘poverty premium’.

Page 130 Page • Business banking: although credit unions can theoretically provide business banking, in practice they lack the resources and skills to do so. Avon Mutual will open on day 1 with experienced business bankers and the essential core services required by SMEs: current account, branches, and overdraft facilities. • Breadth: crucially, the ability of Avon Mutual to offer residential mortgages as well as business and personal loans allows it to rapidly achieve scale and financial viability. • Scale: Avon Mutual is projected to have £500m in deposits and currently BCU has in the region of £8m. • Savers: we consider it highly unlikely that any BCU depositors will switch deposits to Avon Mutual. Our main target market is customers of high street banks. • Loans: there will be individuals with minimal credit records and complex needs that will be unsuitable for lending by a regulated bank and for which a credit union is better suited. • Co-operation: in other countries stakeholder banks and CUs work closely together, and here many CUs are welcoming the advent of our movement. We are in discussions with a number of CUs, including BCU, and with the Association of British CUs, to form collaborations to cross-refer and work 31 together to serve customers. Social Impact – Consolidated Impact Areas

Avon Mutual is a mission-led bank, with financial inclusion built in to its structure and constitution. It is part of our ethos to identify, target and report on our economic, social and environmental impacts. Bristol is Avon Mutual’s core city and has high levels of relative multiple deprivation, with 16% of residents (69,000 people) and 22% of Bristol’s children living in the most deprived areas in England. The social impact measures shown below are illustrative as we intend to work with stakeholders, including Bristol City Council, to understand BCC’s strategic objectives such as the ‘fair and inclusive’ and ‘wellbeing’ strategies and how we can contribute to its targets and develop measures that are specific and appropriate for the needs of the region. We have repeated below our pro-rata estimates of financial vulnerability for residents of Bristol. As an example, based on Bristol University research into the poverty premium, giving 2500 residents access to a fully functional current account for the first time would eliminate excess costs and charges of almost £1m annually.

Page 131 Page BRISTOL Individuals INDICATOR SMEs est. Improved budgeting ability Individuals without bank account and so suffering the Access to branches 12,000 ‘poverty premium’ Active saving Households without bank account and so suffering the Increased trust in banks ‘poverty premium’ 7,000 Lower debt costs Wage growth ‘Non-users’ of the internet 60,000 Bonuses & dividends Employment growth Entirely dependent on cash 19,000 Improved wellbeing Consumers with indicators of potential vulnerability 183,000 Sales growth Can’t pay bills/debt in 3 out of last 6 months 29,000 Reduced poverty premium Diversity of entrepreneurs Not able to find £200 at short notice 40,000 Improved confidence Little or no confidence in money management 88,000 Increased local spending Used unauthorised overdraft facility in last 12 months 22,000 Focus on underserved Borrowing from friends and family in last 12 months 25,000 32 Timeline for banking licence and launch

Preparation Pre-application Application Mobilisation Restrictions Lifted

Incorporation Informal meetings with Formal application Provisional license Unrestricted trading Stakeholder PRA/FCA process gained with full licence engagement Fundraising Maximum 12 months Operations go live with Page 132 Page Business plan Refine business plan Rigorous due diligence branches fitted out and systems integrated development Add experienced Authorisation of key Restriction on amount Form project team bankers to team personnel of deposits

Q4 2020 2020/21 2019 2018

2017 Capital: £0.6m £2m £10m £8m

33 Roadmap to Bank Licence

2019 2020 PRE-APPLICATION Feedback Initial Meet Request Initial Meet Initial Mobilisation Challenging Submit Application Senior Mgmt. & Board Improve Improve Authorised with Restriction Meeting Feedback LEVEL ZERO MILESTONES Deck Meeting Meeting Meeting Interviews Document X Document Y Restriction Lifted Year Quarters Q2 Q3 Q4 Q1 Q2 Q3 Q4

Sources of Funding Funding Funding Model V1 Funding Model V2 FUNDING Strategy Regulators Fees

ImproveWebs Prepare Launching Launch Customer Journey ite Customer Media, Press, etc Press Release (incl AML/KYC) V2 Journey V3 Page 133 Page Customer Journey Proc (Incl SALES Products/Pricing/Prod Roadmap & IT) Business Viability Business Appoint & Train Staff V1 Viability Market Segment, Channel & Product

Fin. Acct Policy/ Proc. Finance Resources V2 Finance Resources V3 Fin Resources 5 yrs Appoint & Train Staff FINANCE ILAAP Investment Policy/Proc V1 V1 ICAAP V1 Risk Policies /Procedures Risk Business Viability Risk Mgmt Framework RMF Analysis /Stress Tests V2 V1 Clarify relationship with Compliance Pol/Proc (AML, KYC, Owners & ControllersOwners & Controllers RISK & COMPLIANCE CSBA ABC) V1 V1 Scope of Competency Corporate Corporate Draft Corporate Corporate Governance & Governance V2 Governance Governance Controls V1 Operational Capability Prepare Chair of Credit Initial Business Proposition Complete set Pol/Proc Final Ops Pol/Proc Add Feedback V1 Risk Comm & Chair of Prepare Satellite Branch RBP V6 Plan Operational & Regulatory RBP V5 RBP Final RBP V2 Audit Opening Pol/Proc Employee Handbook RBP V3 RBP V4 TOM RBP Business Continuity OPERATIONS IT Strategy & V1 Prepare Principal Branch IT Arch Pol/Proc Outsourcing V1 Appoint & Prepare CEO; Test with Family & IT Strategy & Opening Open Branches to V1 IT Strategy & CRO; CFO; Head of Friends Outsource Public Project Plan Outsource Branches Appoint & Train Staff Project Plan Detail Project Plan V2 V2 V3

Milestone on target Milestone Needs Re-planning Milestone at Risk Milestone Date not Confirmed Milestone Completed 34 Investment Offer

Investment in AM will support BCC’s 2018-2023 Corporate Strategy to use BCC assets “to generate a social and financial return”, and to “raise money in a fair but business-like way” as well as the Inclusive & Sustainable Economic Growth Strategy aim to “identify a pipeline of investments to develop inclusive and sustainable economic growth”.

We anticipate an initial annual dividend of 7.5% by year 5, with future increases related to share of profits. As we expect a high and growing dividend yield, moderate share price growth Financial is likely over the medium term. Impact investors (such as local councils) can choose to recycle financial returns into further Page 134 Page social impact in debt, poverty alleviation or financial capability and training.

Supporting local enterprises, business rates and employment. Boosting economic resilience during recessions, protecting jobs and incomes. RETURNS Economic Inclusive growth: spreading opportunities for locally driven business and employment. Recycling more spending and savings back into the Bristol economy.

Tackling financial exclusion and problem debt. Social & Improving financial capability and wellbeing. environmental Restoring trust and building civic participation. Improved environmental and social performance.

Trade with approx. 90,000 members projected by year 9 on an ethical share trading platform EXIT ROUTE such as Ethex and SSX.

This is not investment advice; it is non-binding and it is subject to T&Cs that are to be agreed separately 35 Three levels of investment return

Round 3 investment – Round 1 investment - Round 2 investment - Mobilisation and Pre-application Application launch

Two free shares for every One free share for every One share comes with share purchased which we share purchased which we circa 7.5% dividend. estimate equates to circa estimate equates to circa Investment drawn down 20% IRR. 15% IRR. day after license gained. Page 135 Page Investment used to build Investment to finalise Operations go live with initial team and start licensing, test systems, branches fitted out and licensing process. build bank team and first systems integrated. branches and HQ.

2020/21 2019 2018-19

Capital: £0.5m £2m £18m

36 Local authority investment - precedents

The legal basis and case for local authority Bank Authority Notes investment in local banks has already been Hampshire Portsmouth BC Base case 6% and lower case 4% return over established by a number of precedents. Community Bank £5 million ten years. Capex funded by unsupported Prudential Borrowing In all cases the primary objective is to improve Due diligence costs £25,000 from MT social and economic outcomes. Also yields a Resource Strategy Reserve. ‘Spend to save’ project stream of income which can be applied to the Page 136 Page Hampshire Winchester £250,000 Capital receipts reserve. Using economic council’s strategic objectives. Community Bank Test Valley £500,000 development powers under the general power Approximately 90% of the required investment of competence in S1 Localism Act 2011 does not need to be drawn down until a Redwood Bank Warrington BC Bank will open a northern regional office in £30,000,000 Warrington. Shortlisted in ‘Innovation in provisional licence has been granted by the Finance’ category of 2017 MJ Local regulators. Given that the process of obtaining a Government Achievement Awards licence is extremely rigorous and involves Cambridgeshire Cambridgeshire LA Investment assessing business and financial viability, Building Society Pension £15m expertise of executives and Board and testing of Cambridge and Cambridgeshire LA Joint owners of the Bank at 50% each. The operating procedures and IT systems, we believe Counties Bank Pension £12m Council also has another £12m non-equity Trinity Hall Cambridge investment. this investment is lower risk than would be the Uni £12m case in most business start-ups. Greater London Four London Staged investment 10:50:40 dependent on Mutual Boroughs - £2-£5 progress. First branches opened within million each investing Boroughs 37 Progress up to May 20th 2019 and next steps

Progress • Avon Mutual registered with FCA • Built a NED board of experienced senior bankers and two full time executives plus part time support from two others • Run numerous engagement events and spoken at many other events across the region • Stakeholder mapping, engagements and movement building ongoing

Page 137 Page • www.avonmutual.org website launched • Successfully raised first round £450,000 investment from Stroud Council, two local foundations and local individual impact investors • BCC currently planning on £100k investment and Wiltshire CC on £50k taking us to our target of £600k by end July • Currently meeting with Leaders, CEOs and FDs of all the regional Local Authorities and VCs and FDs of the regional Universities, churches and others to explore investment in our second (£2m) and third (£18) rounds with a great deal of interest already Next steps • Starting banking license meeting with PRA in June • Finalising regulatory business plan • Developing and initiating brand and marketing strategy • Rolling out social media and communications outreach • Recruitment of CEO by end 2019 • Raising a second round investment of £2m 38

Bristol City Council Equality Impact Assessment Form

(Please refer to the Equality Impact Assessment guidance when completing this form)

Name of proposal Avon Mutual Regional Community Bank Directorate and Service Area Resources Name of Lead Officer Denise Murray

Step 1: What is the proposal?

Please explain your proposal in Plain English, avoiding acronyms and jargon. This section should explain how the proposal will impact service users, staff and/or the wider community.

1.1 What is the proposal?

To make an initial investment that will support the establishment of Avon Mutual a Regional Community Bank. If a license is obtained the Avon Mutual will be one of the first customer owned financial institution (full service bank) that has a strong social mission, promoting sustainable and equitable prosperity for the region.

If the Council applies and is approved as a member we will be committed to ensuring that the way the Avon Mutual operates, its culture, governance, and approach to businesses and individuals – will define it as a leading local financial and investment institution, holding the principles of equality; transparency; diversity and inclusion.

The Bank will serve people of ordinary means, community groups, SMEs (SEMs) and social enterprises and is committed to a renaissance of branches and relationship banking. It will serve businesses who wish to innovate and grow but find the traditional routes to finance challenging. It will create and shape future markets and define how our economy will develop in line with and as such has the potential to help transform Bristol’s economy

Step 2: What information do we have?

Decisions must be evidence-based, and involve people with protected characteristics that could be affected. Please use this section to demonstrate understanding of who could be affected by the proposal.

2.1 What data or evidence is there which tells us who is, or could be affected?

Page 138

Current Evidence Base

Bank Branches The UK is losing 60 branches and 300 cash machines a month – often in the poorest areas and branch closures has also been associated with declining local economies. Vulnerable customers including the elderly, disabled, and those of low financial means are particularly affected and many small businesses are reliant on branch facilities for banking takings and have to travel further for banking facilities, harming their business.

Branch closures in Bristol (2015-17)

Micro, Small and Medium Size enterprises

According to the ONS Bristol SME registrations rose 6% 2016-17 and those registered (which are only about 50% of the total) employ 101,000 people and represent £11.7bn business for the economy. Smaller SMEs are increasingly neglected by high street banks - SME loans in the BS postcode area have fallen by 19% in 5 years – almost double the national average of 11%.

Total SME Loans, BS postcode

Page 139

Source: UK Finance Post Code Lending Data. Total of 7 largest banks: Barclays, CYBG, Lloyds, HSBC, Nationwide, RBS/Natwest and Santander

Households and Individuals

Sources: HMT report on cash 2018, CHASM Financial Inclusion Report 2016 & 2017, FCA Financial Lives Survey 2017, Pro-rata on adult population of Bristol City Council area - 365,000 from UK population estimates mid-2017.

People without bank accounts

Source: CHASM, Financial Inclusion Monitoring Report 2017

Page 140

Over 79,000 Bristolians suffer income deprivation and in some areas of Bristol this is likely to be a major concern, with for example some wards have 49% of people living in them suffering from income deprivation and the poverty premium.

According to Bristol University those on low incomes suffer an average £490 p.a. additional cost due to their low income preventing access to better deals. The impact of this ‘poverty premium’ can be severe - for 10% of these households the cost rises to £780 p.a. and for others this premium rises to as much as £2250 p.a. Bristol University’s Personal Finance Research Centre’s report Making the Poverty Premium History has recently called for new forms of banking relevant to the socially excluded.

The table below shows that some equalities groups in Bristol, including disabled people and young people, are more likely to find it difficult to manage financially.

Equalities Group % who find it difficult to manage financially (Quality of Life in Bristol survey 2018-19) Bristol Average 11.4% Female 12.3% Male 10.4% BME (Black & Minority Ethnic Groups) 12.4% WME (White Minority Ethnic Groups 10.4% 16 to 24 years 15.0% 50 years and older 9.0% 65 years and older 3.6% Carer 11.7% Disabled 21.1% LGB (Lesbian Gay Bisexual) 15.4% No religion or faith 9.8% Religion or faith 8.9%

Other Sources: PFRC, CSFI and JRF, 2016 • 2.5m people are using high-cost credit, and 2.1m living in perpetual overdraft debt • 400,000+ households are using high cost “rent-to-own” for essential household goods

The FCA recently estimated that over four million people use some form of unsecured high-cost credit, at a value of £8.3bn. In contrast, the Community Development Finance Institution (CDFI) market lent a total of £20 million in personal loans, and the reach of credit unions appears to be similarly constrained.

Impact

Branch closures worsen financial exclusion for communities and the vulnerable, and can hasten local economic demise. Small, micro, community and social businesses are excluded from lending, reducing growth and opportunity, Cash services are increasingly restricted and some business accounts provide poor value. Lending is

Page 141 too expensive as Banks financially penalise many on low incomes, and are bad at providing for people with complex needs. The Avon Mutual Regional Community Bank could provide a positive contribution by making banking services more readily available in the region.

2.2 Who is missing? Are there any gaps in the data? There are gaps in our diversity data for some protected characteristics citywide, especially where this has not historically been included in census and statutory reporting. 2.3 How have we involved, or will we involve, communities and groups that could be affected? In further developing the proposition for the region it will be necessary to understand the unique points for each locality. Complete detailed market research and community engagement to understand the strengths, challenges and needs of the local communities. Gather additional depth on the impact on customers with protected characteristics and how the operational planning and systems implementation could address these.

Step 3: Who might the proposal impact?

Analysis of impacts on people with protected characteristics must be rigourous. Please demonstrate your analysis of any impacts in this section, referring to all of the equalities groups as defined in the Equality Act 2010.

3.1 Does the proposal have any potentially adverse impacts on people with protected characteristics?

The UK market for current accounts is unusual in its charging structure, with apparently free current accounts (Free-if-in-credit – FIIC) – most other countries charge for banking. FIIC account providers over-sell other complex and untransparent products to pay for the cost of such accounts.

FIIC banking models which are marketed as ‘free’ have a range of hidden costs and penalties that can impact on the most vulnerable. Many customers are excluded from banking and financial services if they do not meet the required minimum income thresholds or fail the credit checks for a FIIC account. Overdraft fees can be excessive and an additional premium is often applied to those on low incomes or with poor credit.

It is proposed that a simple and transparent upfront membership fee of £5/month for personal accounts, £10/month for business accounts will be applied to all customers. This is primarily due to the fact that a full range of services will be provided by the Avon Mutual and they will need to compete with other high street banks. Given the challenges that we seek to address there will need to be an additional offer from Avon Mutual and as such this will come at a costs. For example staffed high street branches, free ATM machines, multi- channel access, video link to talk to customers

Page 142 which can be co-located with community facilities, softer services such as budgeting tools including analysis of expenditure and visualisations and functionality to improve control over personal finances.

It is recognised that there is a risk that these upfront costs could disincentive take up from vulnerable customers and we will be transparent in outlining the costs and the wider benefits that we believe outweighs it, significantly reduces ‘poverty premium’ for poorer customers and provides much better value than the standard banking proposition.

3.2 Can these impacts be mitigated or justified? If so, how?

In addition to the indirect benefits derived from the additional accessibility and services that will be provided ( 3.1 above), the Avon Mutual will offer: • A current account without requiring a minimum income or a credit check, which means that customers currently excluded and seen as a greater risk can bank, improve financial management and receive the wider benefits from direct debit discounts. • Access to cash via ATM’s will be free - bank branches are closing and independently operated machines usually charge around £1.50 to £2 per transaction. • Interest will be paid on whole combined balance across accounts including current account. • The main credit product is an overdraft, which can only be provided directly by banks (and not by credit unions or post office accounts), will have modest overdraft fee that is applied consistently. • Access to residential mortgages as well as business and personal loans.

As shown in the comparison with Lloyds and Natwest FIIC accounts, once the balance exceeds £1000 our account begin to deliver a direct value and is much better value for any customers who need an overdraft.

Avon Mutual are committed in achieving financial inclusion, the same service for all regardless of income, wealth or background and in doing so a simple and transparent fee will need to be applied. The £5/month costs is outweighed by these benefits and the significantly reduced ‘poverty premium’ for low income families..

Page 143 BCC would expect to see further mitigations being explored to protect the most vulnerable, such as working with large socially responsible service providers who may also be end beneficiaries to agree to share or meet these costs. For example via direct debits it would be possible to seek agreement to transfer an element of the cost to the receiver, on the principle that they will also benefit from the direct debit with improved cash flow in a move away from Pay on Bill and reduced arrears, therefore creating a win / win scenario. The deliverability of such a scheme would need to be tested including with local authorities who fall into the category of large service provider and could be applied in direct debit areas such as council tax and offset by discretionary hardship funds.

3.3 Does the proposal create any benefits for people with protected characteristics?

The promoters have set out missions for the Bank to guide its activities and ensure alignment between the activities of the Bank and regional stakeholders. It is anticipated that there are three main ways in which the activities (direct / indirect) of the community Bank, can deliver positive impacts in respect of the protected characteristics and in the reduction of socio-economic inequality:

 Its culture, governance and engagement with its employees (direct).  Its interactions with its customers (direct).  Supporting its customers to deliver positive impacts in respect of the protected characteristics and to address socio-economic inequality within their own ventures and through the activities that the Bank’s financing will enable (indirect).

The additional evidence and due diligence will identify the local need, support policy development and operational implementation in delivering the above.

3.4 Can they be maximised? If so, how?

The promotors will continue to work with a range of businesses, including some that have previously faced issues when seeking to access finance and it is vital that Avon Mutual is able to identify and take opportunities to establish productive partnerships. Recognising the barriers to those partnerships will be key to unlocking the potential of a variety of businesses and sectors.

Avon Mutual should consider how its lending practices can address the particular needs of its potential customers. Their needs may vary depending on the types of persons leading the business, its sector of activity and the geographic location of its business or activity.

Step 4: So what?

Page 144 The Equality Impact Assessment must be able to influence the proposal and decision. This section asks how your understanding of impacts on people with protected characteristics has influenced your proposal, and how the findings of your Equality Impact Assessment can be measured going forward.

4.1 How has the equality impact assessment informed or changed the proposal?

The evidence and data gathered to date and data set for the UK and Bristol specifically has assisted in demonstrating the need for a community bank in the region.

The development of the EQIA will be an iterative process that is built on continuously has the proposition for the establishment of the community bank matures, further due diligence and evidence is gathered, the application for the banking license is approved and the bank becomes operational.

4.2 What actions have been identified going forward?

It will be necessary for each UA to undertake due diligence and sensitivity analysis and this information should be utilized to shape policy and the business plan assumptions prior to any further investment being made. The findings from the wider localised research and due diligence will enable a more detailed EQIA to be completed and evidence of which will support the Bank’s development of its Investment policy and any further investment in the establishment of the community Bank in 2020.

Examples of the approaches that are being considered are captured within section 1.1, 3.3 and 3.4 above. 4.3 How will the impact of your proposal and actions be measured moving forward?

The additional research and wider evidence gathering will assist Local Authorities in ascertaining the baseline for their localities and basis upon which the actual impact of these interventions and wider social value generated can be measured.

Service Director Sign-Off: Equalities Officer Sign Off:

Duncan Fleming Date: 12/6/2019 Date: 12/6/2019

Page 145 Agenda Item 13

Resources Scrutiny Q1 Performance Report

Resources Scrutiny Commission 18th September 2019

Report of: Mike Jackson

Title: Executive Director: Resources

Ward: City-wide

Officer Presenting Report: Mark Wakefield

Contact Telephone Number: 0117 9224738

Recommendation:

To note the Resources Directorate’s performance progress report for Quarter 1, 2019/20.

The significant issues in the report are:

The most significant performance issues against the corporate plan priorities are set out in appendix A1. The Scrutiny Commission are invited to ask questions of the Executive Director; Resources on progress against these priorities.

Page 146 Resources Scrutiny Q1 Performance Report

1. Summary The report and appendix are a summary of the main areas of progress towards delivery of the Corporate Plan 2019-20.

2. Context

This report and appendix is designed to standardise a set of Key Performance Indicators and reporting arrangements around the corporate strategy and Bristol City Council’s business plan. In terms of performance in Q1 for the directorate, progress can be summarised as follows:

Performance summary: Taking the total available KPI results this quarter: • Just under half (47.4%) of those with established targets are performing on or above target (9/19) and, • 90% of those with a direct comparison from 12 months ago have improved (9/10).

The difference in performance against target and that of the direction of travel can in part be attributed to the stretching nature of the targets set.

Service Areas: Commercialisation & Citizens Services • Citizen’s Services KPIs are not now included as part of the Resources Scrutiny performance report, instead being seen by Communities. • Measures from the Commercialisation wing have now been introduced, and we will see more progress from these as the year progresses.

Policy, Strategy & Partnerships • Both performance against target for all Corporate Plan (BCP) metrics and their direction of travel are showing as well below target. These are a measure of the overall organisation, and reflect challenges in the People and G&R directorates as well as Resources. • Equality Action Plans are included in the annual service planning process, one of the milestones in the response to the Equality & Inclusion Policy.

Digital Transformation: • BCC user satisfaction with the service is performing exceptionally well at 98.2%. • A piece of work needs to be undertaken to understand and apply parameters in respect to the KPI, “The % of applications without a version upgrade in previous 12 month period.” This therefore goes unreported for Q1.

Finance: • All of the 4 Finance KPIs are performing at just below target for Q1, however 3 of these are showing an improvement in performance compared to the same period last year. This highlights the stretching nature of the targets set. • Paying invoices on time is one of the measures where we are improving, albeit still below target.

Page 147 Resources Scrutiny Q1 Performance Report

Legal and Democratic Services: • All four of the KPIs here are healthy, with only one (registering deaths) showing as below target, albeit by less than one percentage point, and with direction of travel showing an improvement also.

Workforce & Change: • Sickness absence figures have improved since the last quarter, and are also improved on the same period last year. It feels as though this is significant, however further work will continue to be undertaken to ensure that this trend is maintained.

3. Policy

All BCP Performance Indicators contained within Appendix A1 represents the Resources PIs that are included within the Corporate Strategy (2018/23) and demonstrate our progress.

4. Consultation

a) Internal Performance progress has been presented to the Executive Directorate Meeting prior to the production of this report. b) External Not Applicable

5. Public Sector Equality Duties

5a) Before making a decision, section 149 Equality Act 2010 requires that each decision-maker considers the need to promote equality for persons with the following “protected characteristics”: age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation. Each decision-maker must, therefore, have due regard to the need to:

i) Eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Equality Act 2010.

ii) Advance equality of opportunity between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to --

- remove or minimise disadvantage suffered by persons who share a relevant protected characteristic;

- take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of people who do not share it (in relation to disabled people, this includes, in particular, steps to take account of disabled persons' disabilities);

Page 148 Resources Scrutiny Q1 Performance Report

- encourage persons who share a protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

iii) Foster good relations between persons who share a relevant protected characteristic and those who do not share it. This involves having due regard, in particular, to the need to – - tackle prejudice; and - promote understanding.

5b) This is a report to consider performance progress against the 2018/23 Corporate Strategy, which has had an Equalities Impact Assessment.

Appendices: A1 – Resources Directorate Performance Progress Report (Q1 2019/20)

LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 Background Papers: None

Page 149

RESOURCES SCRUTINY – Q1 2019/20 Performance Summary

FINANCE WORKFORCE & CHANGE Title Target status Title Target status BCP501a: Projected forecast outturn as a percentage of approved BCP522: Reduce the average number of working days lost to sickness Below target Above target budget (BCC) (BCC) BCP502: Increase the percentage of invoices paid on time (BCC) Below target BCP523: Maintain staff turnover On target BCP503: Maintain the percentage of Council Tax collected Below target BCP528: Increase the percentage of employment offers made to people Below target BCP504: Increase the percentage of non-domestic rates collected Below target living in the 10% most deprived areas

OVERALL SUMMARY:

47.4% (9/19) PI’s On / Above target LEGAL & DEMOCRATIC SERVICES 90% (9/10) PI’s DIGITAL TRANSFORMATION (ICT) Title Target status better than Q1 last Title Target status Well above Page 150 Page Well above DRE211: Legal Services - Income vs Target year DRE550: Number of P1 Incidents reported to service desk target target Well above DRE212: Legal Services agency spend as % of total salary bill DRE551: % of applications without a version upgrade in previous 12 Data not target month period entered DRE213: % of births registered within 42 days Above target DRE552: % Service Request fulfilments within Fulfilment time Below target DRE214: % of deaths registered within 5 working days Below target DRE554: % users scoring the IT Services as good or above following Well above incident or service request target

COMMERCIALISATION POLICY, STRATEGY & PERFORMANCE Title Target status Title Target status BCP513: Increase the number of new electric and hybrid vehicle On target Well below registrations BCP531: Increase the percentage of all Corporate Plan PIs on target target BCP514: Increase income generation from Commercialisation Establish opportunities benchmark BCP532: Increase the percentage of all Corporate Plan PIs that are Well below improving (over the last year) target DRE533: Increase % of service areas with an action plan to address On target equality gaps, issues and priorities

DRE534: Communication Campaign effectiveness (%) Below target Appendix A1 Resources Scrutiny - Quarter 1 (1st April - 30 June '19) Performance Progress Report - Quarterly PIs

Comparison Corp Plan 2018/19 2019/20 Q1 Responsible Code Title Status +/- over last 12 Officer Notes KC ref Outturn Target Progress Manager months Resources - Commercialisation & Citizens Q1 target is 0. We are currently producing a strategy paper in conjunction with the Energy Service which will enable the delivery of Increase the number of new electric and hybrid vehicle the EV infrastructure targets in the One City Plan, including one to install W2 BCP513 On target + n/a 26 0 new metric Sara Mannix registrations 35 charge points in the next year. This will help to increase the EV registration for our BCC fleet to more than double the current compliment. We have a £250k target that we are working to, with opportunities Increase income generation from Commercialisation Establish arising in Fleet, Joinery, Education, Events and Conferences amongst WOP4 BCP514 No Target + n/a £0 new metric Sara Mannix opportunities baseline others. It is likely that opportunities will not be realised until the latter end of the FY. Resources - Digital Transformation

Q1 target is 6. Performance is therefore better than target -details are Well above WOP2 DRE550 Number of P1 Incidents reported to service desk - n/a 24 1 new metric Ian Gale as follows: Priority 1 Incidents reported: April = 0, May = 0, June = 1 - target 3rd June, I:122185, ICX Desktop Certificate expiry issue.

% of applications without a version upgrade in previous 12 Data not WOP2 DRE551 - n/a 10.0% new metric Ian Gale Details of the component parts of this KPI still need to be worked up. month period entered Page 151 Page The performance is slightly lower than expected, noting that the Service Desk is currently operating with minus 1 FTE following the secondment of an Analyst to the 2nd line support team since early June. Individual WOP2 DRE552 % Service Request fulfilments within Fulfilment time Below target + n/a 85.0% 81.4% new metric Ian Gale monthly analysis: April: 79.5%, 1356 Requests, 1078 completed within the SLA of 5 days. May: 81.1%, 1299 Requests, 1045 completed within the SLA of 5 days. June: 84.9%, 1108 Requests, 941 completed within the SLA of 5 days.

Performance is showing as well above target for Q1, which is heartening. Individual monthly analysis is as follows: April: 53 customer % users scoring the IT Services as good or above following Well above WOP2 DRE554 + n/a 90.0% 98.2% new metric Ian Gale satisfaction surveys returned, 1 negative, 98.1% m May: 68 customer incident or service request target satisfaction surveys returned, 1 negative, average 98.5% June:46 customer satisfaction surveys returned, 1 negative, average 97.8% Comparison Corp Plan 2018/19 2019/20 Q1 Responsible Code Title Status +/- over last 12 Officer Notes KC ref Outturn Target Progress Manager months Resources - Finance

Overspend of £2.9m forecast at Q1, predominantly within Adult Social Care, Education and Facilities Management. Management actions are Projected forecast outturn as a percentage of approved budget Denise Murray, WOP4 BCP501a Below target - 99.4% 100.0% 100.8% expected to be taken which will bring this will be in line with available (BCC)  Mike Pilcher resources by year end. This is monitored on a regular basis by management and reported to Cabinet.

After an initial improvement at the beginning of the year performance has dropped but is an improvement on the same point last year. A reporting framework has been implemented providing a high level Denise Murray, WOP4 BCP502 Increase the percentage of invoices paid on time (BCC) Below target + 80.30% 90.00% 82.74% analysis of the reasons for late payment with further improvements to  Mike Pilcher these reports to be developed. Notifications to Budget Managers have been implemented but compliance to the Purchase Order process continues to be an issue across all directorates.

In June/July, student exemptions fall to their lowest in the year . This increases the Council tax we collect but will balance itself out over the coming months and there is no concern over collection targets regarding the reduction and reinstatement of exemptions, at this stage. Changes in Council tax Reduction (CTR) has increased the overall Council tax debit by £220K in June. There was a delay in loading WOP4 BCP503 Maintain the percentage of Council Tax collected Below target + 96.82% 96.82% 27.96%  Martin Smith Universal Credit (UC) files for Council tax reduction but work to tackle a backlog of cases is now complete. The introduction of a new online 12 instalment form at the beginning of Page 152 Page the year and the increased use of our other automated online forms has seen more citizens paying over 12 instalments. This has resulted in £2.2m of Council tax instalments being deferred to February and March 2020. The profile of collection will be amended if this trend continues.

The backlog in annual billing post is now cleared. The calculated debit has increased slightly from last month, this is as a result of new WOP4 BCP504 Increase the percentage of non-domestic rates collected Below target + 98.31% 98.35% 28.38% Martin Smith  premises being billed. There is little concern over year end target not being met at this stage. Comparison Corp Plan 2018/19 2019/20 Q1 Responsible Code Title Status +/- over last 12 Officer Notes KC ref Outturn Target Progress Manager months Resources - Legal and Democratic Services Continued good performance against this measure. In April - June 2637 Yvonne Dawes, were registered within the required 42 day period ( 33 exceptions) - WOP2 DRE213 % of births registered within 42 days Above target + 98.0% 98.0% 98.7%  Elizabeth compliance 98.7.% Matthews In June - 904 Births were registered 14 of which were registered after 42 day period - compliance 98.5%

We were less than a percentage point away from the target during the quarter, however it should be noted that performance has been improving month on month, with the figure for June given as 84.7%. Yvonne Dawes, The numbers for Q1 are 1239 deaths registered, 794 with no WOP2 DRE214 % of deaths registered within 5 working days Below target + 79.0% 82.0% 81.1% Elizabeth  involvement from the Coroner (MCCD). Of these 150 were registered Matthews after 5 days. During the month of June 388 Deaths were registered. 262 of which were registered on a MCCD, with 40 being registered after 5 days.

This does not include annual sums yet to be received (TWS Well above Jane Johnson, Subscriptions estimated at £39k). We continue to see strong income WOP4 DRE211 Legal Services - Income vs Target + n/a 100.0% 98.0% new metric target Nancy Rollason from internal projects/recharges but need to increased external client income. Capacity limits our ability to do this at present. Agency spend reduced due to recruitment to permanent posts, return from sick leave and redistribution of work. We have also had internal Well above Jane Johnson, WOP4 DRE212 Legal Services agency spend as % of total salary bill - 32.4% 28.0% 20.0% Client requests to engage external legal services for high profile project target  Nancy Rollason work, funded by the project, for work that we would have, at least in Page 153 Page part, undertaken. Resources - Policy, Strategy & Partnerships Q1 target is zero. Action plan template is being produced to enable each Increase % of service areas with an action plan to address service to produce its own equalities action plan. This process will be EC4 DRE533 On target + n/a 100.0% 0.0% new metric Jean Candler equality gaps, issues and priorities carried out alongside the annual business planning process, as agreed by the Equalities Steering Group. There are 16 Bristol Corporate Plan (BCP) indicators On or Above Target, Well below out of the 41 BCPs with data. Note: 1 BCPs is still "Data not entered". WOP1 BCP531 Increase the percentage of all Corporate Plan PIs on target + 44.0% 67.0% 39.0% new metric Mark Wakefield target [Note - Q1 is not fully indicative as a further 42 BCPs do not have any Q1 data due, so are not included here]

17 of the 34 BCP metrics with a direct comparison to the same period Increase the percentage of all Corporate Plan PIs that are Well below last year have improved, with 17 performing worse than Q1 last year. WOP1 BCP532 + 62.5% 67.0% 50.0% new metric Mark Wakefield improving (over the last year) target [Note - Q1 is not fully indicative as a further 41 BCPs are annually recorded, and therefore are not included here]

BCC’s increased use of technology enabled care (TEC) was promoted using National Carer’s Week as a peg. Extensive, positive media coverage was secured. We held a Clean Air Day event – coverage of the Mayor’s speech included Channel 4 News (with viewing figures up to Saskia 800k). Our tenancy fraud campaign resulted in the return of properties WOP1 DRE534 Communication Campaign effectiveness (%) Below target + 86.0% 90.0% 88.8%  Konynenburg and an increase of 440% on referrals from the previous year. #WeAreBristol was launched – a campaign to promote civic pride ahead of a possible rise in hate crime ahead of Brexit. Our initial aim of 20,000 views of the video has been significantly exceeded with 300,000 views to date. Our objective to influence opinion is ongoing. Comparison Corp Plan 2018/19 2019/20 Q1 Responsible Code Title Status +/- over last 12 Officer Notes KC ref Outturn Target Progress Manager months Resources - Workforce & Change

Mark Jefferson, Target = 10-15%. Turnover remains stable at 12.55% and well below a WOP1 BCP523 Maintain appropriate staff turnover On target - 14.2% 12.5% 12.6%  Mark Williams figure of 15.5% for the same time last year.

Q1 target is 8.75 days. Sickness in Q1 has seen a further significant reduction from Q4 (9.09 days). We are continuing our work on revising our sickness absence policy to take a holistic approach to health and Reduce the average number of working days lost to sickness Mark Jefferson, WOP3 BCP522 Above target - 9.09 days 8.00 days 8.02 wellbeing. This reduction in sickness follows a renewed focus on regular (BCC)  Mark Williams trigger point review meetings to determine where and when action by managers may be most beneficial. Proactive management of casework by HR to resolve cases sooner.

In Q1 2019 36% (16) employees were offered jobs from Bristol most deprived areas took up roles in Adult Social Care, with 13%(6) in Housing & Landlord Services, 11%(5) in Citizen Services and 9%(4) in Children's Service. 24%(11) of these employee are declared as being Increase the percentage of employment offers made to people WOP3 BCP528 Below target + n/a 6.5% 5.7% new metric Mark Williams BAME and 9%(4) disabled. Positive action is being taken to recruit living in the 10% most deprived areas priority groups into new apprenticeship roles, and also to support existing staff from priority groups to progress through apprenticeship opportunities – 4%(7) of all apprenticeships were offered to residents in 25% most deprived wards. Resources - Finance - Annual Metrics

Page 154 Page Increase the percentage of procurement spend with 'Small and WOP4 BCP505 Data not due + 5.00% 5.00% n/a Steve Sandercock Medium sized Enterprises' (SME's) Resources - Policy, Strategy & Partnerships - Annual Metrics Saskia Increase the percentage of people who feel they can influence WC4 BCP533 Data not due + 17.60% 18.00% n/a Konynenburg, local decisions (QoL) Jon Toy WOP1 BCP530 Increase the satisfaction of citizens with our services (QoL) Data not due + 35.20% 37.00% n/a Mark Wakefield Resources - Workforce & Change - Annual Metrics Increase % of colleagues reporting they have the equipment to WOP2 BCP521 Data not due + 61.00% 65.00% n/a Stephanie Griffin do their work effectively Mark Jefferson, WOP3 BCP525 Reduce the gender pay gap Data not due - 3.99% 3.85% n/a Mark Williams

Mark Jefferson, WOP3 BCP526 Reduce the race pay gap Data not due - 12.62% 12.25% n/a Mark Williams

Increase the % of staff who are "clear about what the council is Stephanie Griffin, WOP3 BCP527 Data not due + 76% 80.00% n/a here to do and its priorities" Mark Williams

Improvement Key

Direction of travel IMPROVED compared to same  period in the previous year SAME as previous same period in the previous = year Direction of travel WORSENED compared to  same period in the previous year Corporate Strategy - Key Commitments Empowering & Caring EC1 Give our children the best start in life by protecting and developing children’s centre services, being great corporate parents and protecting children from exploitation or harm. EC2 Reduce the overall level of homelessness and rough sleeping, with no-one needing to spend a ‘second night out’. EC3 Provide ‘help to help yourself’ and ‘help when you need it’ through a sustainable, safe and diverse system of social care and safeguarding provision, with a focus on early help and intervention. EC4 Prioritise community development and enable people to support their community. Fair & Inclusive FI1 Make sure that 2,000 new homes (800 affordable) are built in Bristol each year by 2020. FI2 Improve educational outcomes and reduce educational inequality, whilst ensuring there are enough school places to meet demand and with a transparent admissions process. FI3 Develop a diverse economy that offers opportunity to all and makes quality work experience and apprenticeships available to every young person. FI4 Help develop balanced communities which are inclusive and avoid negative impacts from gentrification. Wellbeing W1 Embed health in all our policies to improve physical and mental health and wellbeing, reducing inequalities and the demand for acute services. W2 Keep Bristol on course to be run entirely on clean energy by 2050 whilst improving our environment to ensure people enjoy cleaner air, cleaner streets and access to parks and green spaces. W3 Tackle food and fuel poverty. W4 Keep Bristol a leading cultural city, helping make culture, sport and play accessible to all. Well-Connected WC1 Improve physical and geographical connectivity; tackling congestion and progressing towards a mass transit system. WC2 Make progress towards being the UK’s best digitally connected city. WC3 Reduce social and economic isolation and help connect people to people, people to jobs and people to opportunity. WC4 Work with cultural partners to involve citizens in the ‘Bristol’ story, giving everyone in the city a stake in our long-term strategies and sense of connection. Workplace Organisational Priorities

Page 155 Page WOP1 Redesign the council to work effectively as a smaller organisation. WOP2 Equip our colleagues to be as productive and efficient as possible. WOP3 Make sure we have an inclusive, high-performing, healthy and motivated workforce. WOP4 Be responsible financial managers and explore new commercial ideas. Agenda Item 14 By virtue of paragraph(s) 3 of Part 1 of Schedule 12A of the Local Government Act 1972.

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